Answer:
A debit to Unearned Rent and a credit to Rent Revenue for $3,675.
Explanation:
The year end adjusting entry is as follows
Unearned rent Dr $3,675
To Rent earned $3,675
(Being the unearned rent is recorded)
The computation is shown below:
= Monthly rate × number of months
= $1,225 × 3 months
= $3,675
The three months is calculated from October 1 to December 31 and the same is to be considered