On May 1,Gomez Company paid $36,000 for rent.The rent covers the period May 1 through August 31.Gomez Company recorded Prepaid Rent of $36,000.What is the balance in the Prepaid Rent account on June 1?

Question

Quizplus · Accepted Answer

The total rent of $36,000 covers four months (May, June, July, August), making the monthly rent $9,000 ($36,000 / 4 months). By June 1, one month (May) has passed, so $9,000 of the prepaid rent has been used, leaving $27,000 ($36,000 - $9,000) as the balance in the Prepaid Rent account.

On May 1,Gomez Company Paid $36,000 for Rent