On December 31, 2010, a company paid $10,000 to rent a storage facility from July 1, 2011 to July 1, 2012. Choose the true statement.
A) The Balance Sheet at December 31, 2010 should report prepaid rent of $10,000 as a non-current asset.
B) The journal entry on December 31, 2010 should include a debit to cash of $10,000.
C) The Income Statement for the year ended December 31, 2010 is unaffected by this transaction.
D) The Balance Sheet at December 31, 2011will not report any of this rent as an asset.

Question

Quizplus · Accepted Answer

The payment is for future rent, so it does not affect the income statement for the year ended December 31, 2010.

On December 31, 2010, a Company Paid $10,000 to Rent