Learn French: On a entendu une rumeur folle.

In everyday spoken French, on is almost always used instead of nous to mean 'we'. Even though it means 'we' in this context, it always takes the same singular verb form as il or elle (which is why we use a instead of avons).

How is the past tense formed here for entendre?

The verb entendre (to hear) is a regular -re verb. To form its past tense (the passé composé), you use the helping verb avoir (here, a) and change the -re ending to -u, giving us entendu.

Why is the adjective folle used instead of fou, and why is it placed after the noun?

Folle is the feminine form of the adjective fou (crazy), and it must match the feminine noun une rumeur. Unlike English, most French adjectives are placed directly after the noun they describe.

The current lesson is about using que (that) to link clauses. Why isn't there a que in this sentence?

This sentence is a single complete thought, so it doesn't need a linking word yet. You would use que if you wanted to add a second phrase explaining what the rumor was, for example: On a entendu une rumeur folle que tu vas partir (We heard a crazy rumor that you are going to leave).