Green Realty Company received a check for $24,000 on July 1 which represents a 6

Question

Green Realty Company received a check for $24,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $24,000. Financial statements will be prepared on July 31. Green Realty should make the following adjusting entry on July 31: 1/debit Rental Revenue, $4,000; credit Unearned Rent, $4,000. 2/debit Unearned Rent, $4,000; credit Rental Revenue, $4,000. 3/debit Cash, $24,000; credit Rental Revenue, $24,000. 4/debit Unearned Rent, $24,000; credit Rental Revenue, $24,000.

Explanation / Answer

2) debit Unearned Rent, $4,000; credit Rental Revenue, $4,000.

(this is the correct answer)

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