The Prepaid Rent in the worksheet's unadjusted trial balance column is $4,000. Prepaid Rent in the balance sheet column is $2,000. Which of the following entries would have caused this difference?

Question

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The difference between the unadjusted trial balance and the balance sheet column for Prepaid Rent is $2,000 ($4,000 - $2,000 = $2,000). This means that $2,000 of Prepaid Rent was used up during the period and needs to be recorded as an expense. To do this, a credit entry of $2,000 to Prepaid Rent would be made in the adjustments column of the worksheet, which would also require a corresponding debit entry to Rent Expense. Choice A and D do not address the issue of the difference in Prepaid Rent, and Choice B suggests crediting Rent Expense instead of Prepaid Rent, which would not properly reflect the usage of the prepaid rent during the period.

The Prepaid Rent in the Worksheet's Unadjusted Trial Balance Column