Question

The balance in the Prepaid Rent account before adjustment at the end of the fiscal year is $10,000, which represents five months of rent which was paid on December 1. The year-end adjusting entry required on December 31 is Group of answer choices debit Prepaid Rent, $2,000; credit Rent Expense, $2,000 debit Rent Expense, $8,000; credit Prepaid Rent, $8,000 debit Rent Expense, $10,000; credit Prepaid Rent, $10,000 debit Rent Expense, $2,000; credit Prepaid Rent, $2,000

Answer 1

Answer: debit Rent Expense, $2,000; credit Prepaid Rent, $2,000---D

Explanation:

Balance in Prepaid rent account = $10,000

Rent expense = $10,000/5 months = $2,000

Adjusting journal entry To record the expiration of rent for December month  

Date Accounts Titles and Explanations Debit Credit

Dec. 31 Rent Expense ($10,000/5 months) $2,000  

  Prepaid Rent                                                           $2,000

debit Rent Expense, $2,000; credit Prepaid Rent, $2,000---D