Question

QUESTION 18

1. Use the following information to answer the next Two questions: (Questions 1 of 2)

   On November 1, 2019, Kathie Company received five months' rent for office space for November 2019 through March 2010 totaling $50,000. The payment was originally recorded by a credit to a real account. Kathie’s required adjusting entry at December 31, 2019 would include:

   	A.	a debit to Unearned Rent Revenue.
   	B.	a credit to Rent Expense.
   	C.	a credit to Unearned Rent Revenue.
   	D.	a debit to Rent Revenue.
   	E.	none of the above.

2 points   

QUESTION 18

B

1. Use the following information to answer the next Two questions: (Questions 2 of 2)

   On November 1, 2019, Kathie Company received five months' rent for office space for November 2019 through March 2010 totaling $50,000.  The payment was originally recorded by a credit to a real account.

   The amount of the adjusting entry required at December 31, 2019 would be:

   	A.	$30,000.
   	B.	$10,000.
   	C.	none of the above
   	D.	$20,000.
   	E.	$40,000.

Answer 1

18.A

On November 1, 2019, Kathie Company received five months' .

At December 31, 2019 rent revenue has been earned for 2 months.

Rent revenue for 2 months = 50,000 x 2/5

= $20,000

The following journal entry will be made at December 31, 2019:

Date	General Journal	Debit	Credit
December 31, 2019	Unearned rent revenue	$20,000
	Rent revenue		$20,000

A debit to Unearned Rent Revenue

Correct option is A.

18. B.

On November 1, 2019, Kathie Company received five months' .

At December 31, 2019 rent revenue has been earned for 2 months.

Rent revenue for 2 months = 50,000 x 2/5

= $20,000

The amount of the adjusting entry required at December 31, 2019 would be $20,000

Correct option is D.

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