Chase Company rents space to a tenant for $2,200 per month.The tenant currently owes rent for November and December.The tenant has agreed to pay the November,December,and January rents in full on January 15 and has agreed not to fall behind again.The adjusting entry needed on December 31 is:

A) Debit Rent Receivable,$6,600; credit Rent Earned,$6,600.
B) Debit Unearned Rent,$4,400; credit Rent Earned,$4,400.
C) Debit Unearned Rent,$2,200; credit Rent Earned,$2,200.
D) Debit Rent Receivable,$4,400; credit Rent Earned,$4,400.
E) Debit Rent Receivable,$2,200; credit Rent Earned,$2,200.

Question

Anastazja Oscislowski · Accepted Answer

Final Answer : D, Explanation :  The correct adjusting entry on December 31 is to recognize the rent that has been earned but not yet received for November and December. Since the rent is $2,200 per month and the tenant owes for two months, the total receivable is $4,400. Therefore, Rent Receivable should be debited and Rent Earned should be credited by $4,400.

Definitions

Learning Objectives

Learning Objectives

Related questions