Answer:
At May 31, Austin's Tavern should recorded of $5,500 for the period January 1 through May 31 by the entry:
Debit Rent Expense $5,500
Credits Prepaid rent $5,500
Explanation:
On January 1, Austin's Tavern prepaid rent of $ 13 comma 200 for the full year. The company records the insurance as the prepaid Insurance:
Debit Prepaid rent $13,200
Credit Cash $13,200
On May 31, the last day of the following 5 months, the company records an adjusting entry that Credits Prepaid rent for $5,500 ($13,200 divided by 12 months times the 5 months that will be prepaid as of May 31) and Debits Rent Expense for $5,500
Debit Rent Expense $5,500
Credits Prepaid rent $5,500
