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On December 1, Jaymie Corporation received $450 for 3 months' rent in advance. It recorded the cash and the liability (Unearned Rent) to provide the use of a portion of the building. By December 31, it has earned 1 month of rent. The adjusting entry is a debit (decrease) of $150 to the Unearned Rent liability and a credit (increase) of $150 to Rent Income. The result is a $150 increase in revenues and a $300 remaining balance in the Unearned Rent liability. This adjusting entry is the second entry presented in

On December 1, Jaymie Corporation received $450 for 3 months' rent in advance. It recorded the cash and the liability (Unearned Rent) to provide the use of a portion of the building. By December 31, it has earned 1 month of rent. The adjusting entry is a debit (decrease) of $150 to the Unearned Rent liability and a credit (increase) of $150 to Rent Income. The result is a $150 increase in revenues and a $300 remaining balance in the Unearned Rent liability. This adjusting entry is the second entry presented in

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 1, Jaymie Corporation received $450 for 3 months' rent in advance. It recorded the cash and the liability (Unearned Rent) to provide the use of a portion of the building. By December 31, it has earned 1 month of rent. The adjusting entry is a debit (decrease) of $150 to the Unearned Rent liability and a credit (increase) of $150 to Rent Income. The result is a $150 increase in revenues and a $300 remaining balance in the Unearned Rent liability. This adjusting entry is the second entry presented in Example 3.4.
Transcribed Image Text:On December 1, Jaymie Corporation received $450 for 3 months' rent in advance. It recorded the cash and the liability (Unearned Rent) to provide the use of a portion of the building. By December 31, it has earned 1 month of rent. The adjusting entry is a debit (decrease) of $150 to the Unearned Rent liability and a credit (increase) of $150 to Rent Income. The result is a $150 increase in revenues and a $300 remaining balance in the Unearned Rent liability. This adjusting entry is the second entry presented in Example 3.4.
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