Rocket Company paid $16,000 for January, February, March, and April rent in advance. The balance in the Prepaid Rent account as of January 31 is:
A) $4,000
B) $12,000
C) $16,000
D) $- 0-

Question

Quizplus · Accepted Answer

The rent is paid for four months, so each month costs $4,000 ($16,000/4). By January 31, one month's rent has been used, leaving a balance of $12,000 in the Prepaid Rent account for the remaining three months.

Rocket Company Paid $16,000 for January, February, March, and April