Answer:
Debit nominal account $14,400
Credit Rental revenue $14,400
Being entries to recognize rental income earned between 1 April and 31 December 2020.
Step-by-step explanation:
When cash is received in advance for services yet to be rendered, the company has a liability to perform. As such the entries posted then is a debit to cash and a credit to unearned revenue.
If Crane Company received $19200 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account, as at December 31, 2020, the amount earned
= (9/12) × $19200
= $14,400
This amount would be debited to the nominal account and a credit would be recorded in the rental revenue account.