On December 31, the Human Bean Coffee Shop paid $40,500 for a full year of rent

Question

On December 31, the Human Bean Coffee Shop paid $40,500 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be: Debit Rent expense and credit prepaid rent for $3,375. Debit Rent expense and credit prepaid rent for $40,500. Debit prepaid rent and credit rent expense for $40,500. Debit prepaid rent and credit rent expense for $3,375.

Explanation / Answer

ANSWER = A) Debit Rent expense and credit prepaid rent for $ 3375

Rent for full year = $40500

rent for month of january = $ 40500 * 1 /12 = $ 3375

Entry already passed= prepaid rent debit and cash credit for $40500

Now, on january 31... entry =

Debit Rent expense and credit prepaid rent for $ 3375

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.