2. Bay City Corporation received $21,000 for 12 months rent in advance. What ent

Question

2. Bay City Corporation received $21,000 for 12 months rent in advance. What entry is used to record this transaction? A. Cash 21,000          Prepaid Rent 21,000 B. Cash 21,000          Unearned Revenue 21,000 C. Rent Expense 21,000          Cash 21,000 D. Unearned Revenue 21,000          Rent Revenue 21,000 2. Bay City Corporation received $21,000 for 12 months rent in advance. What entry is used to record this transaction? A. Cash 21,000          Prepaid Rent 21,000 B. Cash 21,000          Unearned Revenue 21,000 C. Rent Expense 21,000          Cash 21,000 D. Unearned Revenue 21,000          Rent Revenue 21,000

Explanation / Answer

Option B

The journal entry for Unearned revenue (rent in advance) would be

Cash 21,000(Debit)

Unearned revenue 21,000(credit)

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