The journal entry to record a payment made in January for rent for the months of February and March would include:
A)a debit to Rent Expense, and a credit to Sue Snow, Capital.
B)a debit to Sue Snow, Drawing and a credit to Rent Expense.
C)a debit to Rent Expense and a credit to Cash.
D)a debit to Prepaid Rent and a credit to Cash.

Question

Quizplus · Accepted Answer

The correct journal entry for a payment made in advance for rent is to debit Prepaid Rent (an asset account representing rent paid but not yet incurred) and to credit Cash (to show the outflow of cash). This reflects the prepayment nature of the transaction, where the expense will be recognized in the future periods when the rent is actually incurred.

The Journal Entry to Record a Payment Made in January