Question

Sheffield Real Estate received a check for $27000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $27000. Financial statements will be prepared on July 31. Sheffield Real Estate should make the following adjusting entry on July 31:

Debit Unearned Rent Revenue, $4500; Credit Rent Revenue, $4500.

Debit Unearned Rent Revenue, $27000; Credit Rent Revenue, $24000.

Debit Cash, $27000; Credit Rent Revenue, $27000.

Debit Rent Revenue, $4500; Credit Unearned Rent Revenue, $4500.

Answer 1

Adjusting entry

Date	account and explanation	Debit	Credit
	Unearned rent revenue (27000/6)	4500
	Rent revenue		4500
	(To record rent revenue)

So answer is a) Debit Unearned Rent Revenue, $4500; Credit Rent Revenue, $4500.