On December 1, 2016, Vonn Corporation paid $8,000 rent in advance.The rent per month is $1,000.If Hazel's accounting period ends on December 31, 2016, what will be reported on the financial statements?

Question

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Since Vonn Corporation paid $8,000 for rent in advance for 8 months, only $1,000 (one month's rent) would be recognized as an expense in December. The remaining $7,000 is considered a prepaid expense and would be reported as Prepaid Rent on the balance sheet at December 31, 2016.

On December 1, 2016, Vonn Corporation Paid $8,000 Rent in Advance.The