Honey Brown Inc. paid six months' rent in advance totalling $9,000. At the end of the first month, the adjusting entry would include a:

Question

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When rent is paid in advance, it is recorded as Prepaid Rent. At the end of the first month, a portion of the prepaid rent has now been "used up" and needs to be reflected in the company's expenses. Therefore, an adjusting entry is needed to move a portion of the prepaid rent (asset) to rent expense (expense). 
Since the company paid $9,000 for 6 months of rent in advance, the monthly rent expense is $1,500. Therefore, the adjusting entry should debit Rent Expense for $1,500 and credit Prepaid Rent for $1,500 to reflect the portion of the rent that has been used up in the first month.