On July 1, Madrid Corporation received $7,200 from New Iberia Company for six months rent on a factory building and recorded it as a revenue. What adjusting entry will Madrid make on August 31?

A)
Prepaid Rent
4,800

Rent Revenue

4,800

B)
Rent Revenue
4,800

Unearned Rent

4,800

C)
Unearned Rent
2,400

Rent Revenue

2,400

D)
Rent Revenue
2,400

Unearned Rent

2,400

Answer: B

Business

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