The balance in the prepaid rent account before adjustment at the end of the year is $12,000 and represents three months rent paid on December 1.The adjusting entry required on December 31 is:
A)debit Prepaid Rent, $4,000; credit Rent Expense $4,000.
B)debit Prepaid Rent, $8,000; credit Rent Expense, $8,000.
C)debit Rent Expense, $12,000; credit Prepaid Rent, $12,000.
D)debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.

Question

Quizplus · Accepted Answer

The rent for one month ($12,000/3) is $4,000. By December 31, one month has passed, so $4,000 should be recognized as rent expense.

The Balance in the Prepaid Rent Account Before Adjustment at the End