Question

Pharoah Company sublet a portion of its warehouse for five years at an annual rental of $75900, beginning on May 1, 2017. The tenant, Sheri Charter, paid one year's rent in advance, which Pharoah recorded as a credit to Unearned Rent Revenue. Pharoah reports on a calendar-year basis. The adjustment on December 31, 2017 for Pharoah should be:_____.A.Unearned Rent Revenue 25,000 Rent Revenue 25,000 B. Unearned Rent Revenue 50,000 Revenue 50,000 C. No entry D. Rent Revenue Unearned 25,000 Rent Revenue 25,000

Answer 1

Dr Unearned Rent Revenue $50,600

Cr Rent Revenue $50,600

Step-by-step explanation:

Based on the information given if the Company dedide to sublet a portion of their warehouse for 5 years at an annual rental of the amount of $75,900 beginning on May 1, 2017 The adjustment journal entry on December 31, 2017 for Pharoah should be:

Dr. Unearned Rent Revenue $50,600

Cr Rent Revenue $50,600

(8/12*75,900)

May 1 2017 to December 31, 2017=8 months