Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. Fragmental collected the entire $6,400 cash on October 1 and recorded it as unearned revenue. The journal entry made by Fragmental Co. at year-end on December 31 would be: A) A debit to Rent Revenue and a credit to Cash for $2,400.
B) A debit to Rent Revenue and a credit to Unearned Rent for $2,400.
C) A debit to Cash and a credit to Rent Revenue for $6,400
D) A debit to Unearned Rent and a credit to Rent Earned for $2,400.
E) A debit to Unearned Rent and a credit to Rent Earned for $4,000.

A debit to Unearned Rent and a credit to Rent Earned for $2,400

Explanation:

The following information can be gotten from the question:

Amount of total rent = $6400

Since the cash relating to rent was collected and recorded on October 1, the amount unearned will be calculated using 3 months i.e from October to December. This will be:

= 3/8 × $6400

= 3 × $800

= $2400

The journal entry will be:

Unearned rent A/c Dr $2400

Rent A/c Cr $2400

A debit to Unearned Rent and a credit to Rent Earned for $2,400

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explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.