Question

g Suppose on January 1 Austin​'s Tavern prepaid rent of $ 13 comma 200 for the full year. At May 31​, how much rent expense should be recorded for the period January 1 through May 31​? At May 31, Austin's Tavern should record $ 3,300 of rent expense.

Answer 1

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