Reference no: EM132729994

Question - Natsu Company's annual accounting period ends on October 31, 2019. The following information concerns the adjusting entries that need to be recorded as of that date. Entries can draw from the following partial chart of accounts: Cash; Rent Receivable; Office Supplies; Prepaid Insurance; Building; Accumulated Depreciation-Building; Salaries Payable; Unearned Rent; Rent Earned; Salaries Expense; Office Supplies Expense; Insurance Expense; and Depreciation Expense-Building.

Because the company does not occupy the entire building it owns, it rented space to a tenant at $1,000 per month, starting on September 1, 2019. The rent was paid on time on September 1, and the amount received was credited to the Rent Earned account. However, the October rent has not been paid. The company has worked out an agreement with the tenant, who has promised to pay both October and November rent in full on November 15. The tenant has agreed not to fall behind again.

Would this debit rent receivable and credit cash for $1,000? Or would this debit and credit unearned rent and rent earned?