Jason Company paid $5,400 for one year's rent in advance beginning on October 1, Year 1. Jason's Year 1 income statement would report rent expense, and its statement of cash flows would report cash outflow for rent, respectively, of

Question

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The Year 1 income statement would report rent expense for three months (October, November, December), which is $1,350 ($5,400/12 months * 3 months). The statement of cash flows would report the total cash outflow for rent paid in advance, which is $5,400.

Jason Company Paid $5,400 for One Year's Rent in Advance