On December 1,2017,Vonn Corporation paid $8,000 rent in advance.The rent per month is $1,000.If Vonn's accounting period ends on December 31,2017,what will be reported on the financial statements?

Question

Quizplus · Accepted Answer

Since Vonn Corporation paid $8,000 for rent in advance covering 8 months, only $1,000 (one month's rent for December) would be recognized as an expense in December 2017. The remaining $7,000 is a prepaid expense, representing the rent for January through July of the following year, and would be reported as Prepaid Rent on the balance sheet at December 31, 2017.

On December 1,2017,Vonn Corporation Paid $8,000 Rent in Advance