Three months of rent were prepaid on September 1 for $10,800,but two months have now expired,leaving only one month prepaid at October 31.What is the amount of rent expense that will be recorded in the related adjusting entry dated October 31?

Question

Quizplus · Accepted Answer

The $10,800 prepayment covered three months of rent,which means that the rent for each month is $3,600 (or $10,800 ÷ 3 months).If two of the three months have expired,the rent expense recorded in the adjustment will be $7,200 (or $3,600 per month × 2 months).

Three Months of Rent Were Prepaid on September 1 for $10,800,but