On november 1, 2009, Bug Busters collected $6,000 in advance for three months of service to be provided beginning on that date. it was credited in full to unearned rent revenue. Assuming the accounting year ends december 31, give the adjusting entry required on december 31, 2009 (assuming that no adjusting entries have been made during the year).
| Total months remained in accounting year | 2 | |||||||||
| Total months of service | 3 | |||||||||
| Service that will be rcognised for 2 months ending in accounting year as on december 31 | ||||||||||
| = | $ 6,000 | x 2/3 | ||||||||
| = | $ 4,000 | |||||||||
| Adjusting Entry: | ||||||||||
| Date | Account titles and explanations | Debit | Credit | |||||||
| December 31, 2009 | Unearned Rent Revenue | $ 4,000 | ||||||||
| Rent Revenue | $ 4,000 | |||||||||
| (To record adjustments of unearned rent revenue) | ||||||||||
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