Cash received as rent income under cash basis

Steps:

• Note opening rent receivable balance: $400 debit.
• Note additional debit entry for rent accrued: $3600 (Dec 31 entry).
• Note closing rent receivable balance: $600 debit.
• Compute cash received (credit entry): $400 +$3600 - $600 =$3400.

Why A is correct:

• Under cash basis accounting, income statement records revenue when cash is received, not when earned; formula is opening receivable + accrued rent - closing receivable = $3400 credit for rent income.

Why the others are wrong:

• B: Debit indicates expense, but rent is income here.
• C: $3800 reflects accrual basis (cash received + net increase in receivable =$3400 + $200), not cash basis.

Final answer: A