Question

he company rented an office for $ 3600 per month starting from January​ 1, 2018. On that​ day, ABC prepaid the rent through June 30. The company makes adjusting entries at the end of each month. What is the balance in the Prepaid Rent account as of April​ 30, 2018?

Answer 1

Answer:

The balance in the Prepaid Rent account as of April​ 30, 2018 = $7,200

Explanation:

Monthly rent = $3,600

Rent paid on 1 January = $3,600 $\times$ 6 = $21,600

Out of which Prepaid Rent = $3,600 $\times$ 5 = $18,000

for 5 months

Prepaid rent account as on April 30 balance will be of rent for May and June,

That is $3,600  $\times$ 2 = $7,200

Only this amount will be outstanding in prepaid rent as for the month till April each month rent would have been adjusted from February to April.

Final Answer

The balance in the Prepaid Rent account as of April​ 30, 2018 = $7,200