On April 1, Lightpath Technologies paid $40,000 for rent on warehouse space one year in advance. If Lightpath makes the appropriate adjusting entry, how much will be reported on the December 31 income statement for rent expense?

Question

Quizplus · Accepted Answer

Rent for 9 months (April through December) is expensed in the current year, so $40,000 for 12 months means $3,333.33 per month. For 9 months, that's $3,333.33 * 9 = $30,000.

On April 1, Lightpath Technologies Paid $40,000 for Rent on Warehouse