Answer:
debit Unearned Rent Revenue and credit Rent Revenue, $12,000.
Explanation:
Provided information we have,
Rent is received on 1 September 2017 for a period of 1 year on which it is accounted as Unearned Rent amounting $36,000.
Entry on that date would be
Cash A/c Dr. $36,000
To Unearned Rent $36,000
At the end of the year on 31 December 2017, we have period of current year lapsed = 1 September to 31 December = 4 months.
Thus rent income for the year = $36,000 [tex]\times \frac{4}{12}[/tex] = $12,000
Therefore this rent of $12,000 will be recognized as rent income for the year 2017.
Entry will be
Unearned Rent A/c Dr. $12,000
To Rent Revenue $12,000
