When a company pays cash in advance for rent that is to be used over the next two years,the company records a debit to ______ and a credit to ______:
Prepaid
A) Rent; Cash Rent
B) Expense; Cash
C) Cash; Prepaid Rent
D) Prepaid Rent; Accounts Receivable

Question

Quizplus · Accepted Answer

The correct entry is a debit to Prepaid Rent and a credit to Cash. Prepaid Rent is an asset account that represents the rent paid in advance, and Cash is credited to reflect the outflow of cash.

When a Company Pays Cash in Advance for Rent That