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19 December, 01:37

Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,225. Fragmental collected the entire $9,800 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be: Multiple Choice A debit to Rent Revenue and a credit to Cash for $3,675. A debit to Unearned Rent and a credit to Rent Revenue for $6,125. A debit to Unearned Rent and a credit to Rent Revenue for $3,675. A debit to Cash and a credit to Rent Revenue for $9,800. A debit to Rent Revenue and a credit to Unearned Rent for $3,675.

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  1. 19 December, 03:29
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    A debit to Unearned Rent and a credit to Rent Revenue for $3,675.

    Explanation:

    The year end adjusting entry is as follows

    Unearned rent Dr $3,675

    To Rent earned $3,675

    (Being the unearned rent is recorded)

    The computation is shown below:

    = Monthly rate * number of months

    = $1,225 * 3 months

    = $3,675

    The three months is calculated from October 1 to December 31 and the same is to be considered
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