Final answer:
The rent received in advance will be reported as deferred or unearned revenue, a liability on the balance sheet, following the accrual basis of accounting.
Step-by-step explanation:
If a company receives the rent for January 2014 from a tenant in December 2013, this will be reported as deferred revenue or unearned revenue on the company's balance sheet. Deferred revenue is a liability because it refers to the income that has been received but not earned, and accordingly, it has not yet been recognized as revenue in the accounting records.
According to the accrual basis of accounting, revenue is recognized when it is earned, regardless of when the cash is received.