On Mar.1,Brown's Antiques paid $18,000 for 12 months of advance rent on its store and immediately debited an asset account for the full amount.Select the adjusting entry made on December 31,to record the amount of rent that had expired.

Question

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The adjusting entry for prepaid rent on December 31 would debit the Prepaid Rent account (to decrease it) and credit Rent Expense (to record the amount of rent that has expired). Choice C shows a debit to Prepaid Rent for $15,000 (12 months of rent that has not yet been used) and a credit to Rent Expense for the same amount. This entry would accurately record the amount of rent that had expired at the end of the year.

On Mar1,Brown's Antiques Paid $18,000 for 12 Months of Advance Rent