On March 1,2016,the company paid $6,000 rent in advance for a 12-month period.On December 31,2016,the company's adjustment for expired rent would include:

Question

Quizplus · Accepted Answer

Rent Expense should be debited and Prepaid Rent should be credited for the amount of rent that has expired (used) in the current year. Since the company paid $6,000 rent in advance for a 12-month period, the amount of rent that has expired by December 31, 2016 is $5,000 ($6,000/12 * 10 months). Therefore, the company should debit Rent Expense for $5,000 and credit Prepaid Rent for $5,000. Option B is the correct choice.

On March 1,2016,the Company Paid $6,000 Rent in Advance for a 12-Month