Question

Prepaid rent has a balance of $6,000 that was paid on July 1st for 6 months of rent. The date is now August 31st. What should the adjusting journal entry be to correct the prepaid rent balance? O Debit Rent Expense $1,000 and Credit Prepaid Rent $1,000 Debit Insurance Expense $2,000 and Credit Prepaid Insurance $2,000 Debit Rent Expense $2,000, Credit Prepaid Rent $2,000 O Debit Prepaid Rent $2,000 and Credit Rent Expense $2,000

Answer 1

Correct answer:

Debit Rent expenses $ 2000 and credit pre-paid rent $2000.

Explanation:

The pre-paid rent is 6000 for 6 months therefore it will be 2000 for two months ( from July 1st to August 31st)

In order to pass the adjusting entry, we will debit Rent expenses by $2000 and credit pre-paid rent by $ 2000.

End of answer.

Please give a thumbs up it will be highly appreciated.

Thanks.