Question

c. Prepaid Rent. On September 1 of the current year, the company prepaid $46,800 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $46,800. DR or CR? Prepaid Rent Step 1: Determine what the current account balance equals. 46,800 Debit 46,800 Step 2: Determine what the current account balance should equal. $ 7,800 Debit 7,800 Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. Adjusting Entry Rent Expense Debit Credit Prepaid Rent

Answer 1

Rent expense for the year = $46,800 / 24 months * 4months =7,800

so, for journal entry amount will be 7,800

to get value for step 2, you have to deduct 7,800 from step 1.

it will be $46,800 - 7,800 = 39,000

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