Question

On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). Movers' year-end financial statements as of December 31, 2019 will show:___________

Answer 1

Answer:

Rent expense = $1,000

Prepaid rent = $23,000

Step-by-step explanation:

The computation is presented below:

Provided that

2 years rent = $24,000

Now the one month rent is

= Total rent ÷ Number of months in a 2 years

= $24,000 ÷ 24 months

= $1,000

So, for financial statements as of December 31,2019 is $1,000 per month rent expense

And, the prepaid rent would be

= Total rent - rent expense

= $24,000 - $1,000

= $23,000