Subariffic Company signed a two-year lease on July 1, 2019, and paid the $104,400 total rent in advance. Subariffic recorded the transaction as a debit to Prepaid Rent and a credit to Cash.
What adjusting entry should Subariffic make on December 31, 2019 (no previous adjustment has been made)?

Question

Quizplus · Accepted Answer

Transfer 6/24 x $104,400 = $26,100 from Prepaid Rent to Rent Expense

Subariffic Company Signed a Two-Year Lease on July 1, 2019