Acct HW help: On March 1, $12,000 was collected as rent for one year and a nominal...

Y

Yesenia R

New member
...account was credited.? Present, in journal form, the adjustments that would be made on July 31, 2007, the end of the fiscal year.

The correct answer is:
Dr. Rent Revenue 7,000
Cr. Unearned Revenue 7,000

What I thought the answer was (showing the revenue that was already earned):
Dr. Unearned Revenue 5,000
Cr. Rent Revenue 5,000

So my question is, why is the correct answer the former and not the latter? In adjusting entries do you journalize the amount that is still left to be earned?

I appreciate any help you guys can give me!
 
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