On November 1, 2019, Peaches Consulting Service paid $4,800 for 12 months of advance rent on its office space. The correct adjusting entry on December 31, 2019, to show the amount of rent that had expired would include:
A)debit Rent Expense $4,800; credit Prepaid Rent $4,800
B)debit Rent Expense $800; credit Prepaid Rent $800
C)debit Rent Expense $400; credit Prepaid Rent $400
D)debit Prepaid Rent $4,000; credit Rent Expense $4,000

Question

Quizplus · Accepted Answer

The correct adjusting entry on December 31, 2019, to show the amount of rent that had expired would include: debit Rent Expense $800; credit Prepaid Rent $800. This is because one month's rent has expired, and the Prepaid Rent account should be reduced by that amount.

On November 1, 2019, Peaches Consulting Service Paid $4,800 for 12