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On October 1, Vista View Company rented warehouse space to a tenant for $3,100 per month. The tenant paid five months' rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The adjusting entry needed on December 31 is: a. Debit Unearned Rent, $9,300; credit Rent Earned, $9,300. b. Debit Unearned Rent, $15,500; credit Rent Earned, $15,500. c. Debit Unearned Rent, $6,200; credit Rent Earned, $6,200. d. Debit Rent Receivable, $15,500; credit Rent Earned, $15,500. e. Debit Rent Receivable, $9,300; credit Rent Earned, $9,300.
On October 1, Vista View Company rented warehouse space to a tenant for $3,100 per month. The tenant paid five months' rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The adjusting entry needed on December 31 is: a. Debit Unearned Rent, $9,300; credit Rent Earned, $9,300. b. Debit Unearned Rent, $15,500; credit Rent Earned, $15,500. c. Debit Unearned Rent, $6,200; credit Rent Earned, $6,200. d. Debit Rent Receivable, $15,500; credit Rent Earned, $15,500. e. Debit Rent Receivable, $9,300; credit Rent Earned, $9,300.
Final answer:The correct adjusting entry at year-end would be to debit Unearned Rent for $9,300 and creditRent Earnedfor the same amount. This recognizes the rent that has been earned for October, November and December. The remaining $6,200 will be recognized as income in the following year. Hence, option (C) is correct.Explanation:TheVista View Companyreceived an advance payment for five months' rent at $3,100 per month, totaling $15,500, which was credited to theUnearned Rentaccount. As of December 31, only three months of rent (October, November, and December) have been actually earned, totaling $9,300 ($3,100 x 3). The unearned rent, which is a liability, will need to be reduced by this amount and the same amount will be recognized as revenue in theRent Earnedaccount. This is reflected by theadjusting entry: Debit Unearned Rent, $9,300; Credit Rent Earned, $9,300. So, the correct answer to this question is option a. The remaining $6,200 of the advance payment will remain in Unearned Rent until it is earned in the subsequentaccounting period(January and February of the next year).Learn more about Adjusting Entry here:brainly.com/question/33175618#SPJ11...