A company pays $36,000 for twelve months' rent on October 1, recording the prepayment as an asset. The adjusting entry on December 31 is a debit to Rent Expense, $9,000, and a credit to Prepaid Rent, $9,000.

Question

Quizplus · Accepted Answer

Rent expense per month = $36,000 / 12 = $3,000
Rent expense from October 1 to December 31 = $3,000 × 3 = $9,000 11ea84e6_b02c_c54b_9a63_db0b373318a3_TB2281_00_TB2281_00

A Company Pays $36,000 for Twelve Months' Rent on October