On November 1 of the current year, Prepaid Rent was debited $5,400 for three months of rent, in advance. The amount of the adjusting entry on December 31 is:

Name: On November 1 of the current year, Prepaid Rent was debited $5,400 for three months of rent, in advance. The amount of the adjusting entry on December 31 is:
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Question

Quizplus · Accepted Answer

The rent is prepaid for three months, so each month costs $1,800 ($5,400/3). By December 31, two months have passed, so the adjusting entry should be for $3,600 (2 months x $1,800).

On November 1 of the Current Year, Prepaid Rent Was