PPW Co Leased a Portion of Its Store to Another Company

Multiple Choice

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year-end on December 31 would include:

A) A debit to Rent Earned for $2,400.
B) A credit to Unearned Rent for $2,400.
C) A debit to Cash for $6,400.
D) A credit to Rent Earned for $2,400.
E) A debit to Unearned Rent for $4,000.