Williams Enterprises prepaid three months of office rent totaling $8,700 on October 1,2019.Assuming Williams records deferred expenses using the alternative treatment,what would be the entry on October 1,2019?
A) Debit Prepaid Rent and credit Cash for $8,700
B) No entry is needed until the expense is incurred
C) Debit Cash and credit Unearned Rent for $8,700
D) Debit Rent Expense and credit Cash for $8,700

Question

Quizplus · Accepted Answer

Under the alternative treatment for deferred expenses, the expense is recorded immediately. Therefore, Rent Expense is debited and Cash is credited for the prepaid amount.

Williams Enterprises Prepaid Three Months of Office Rent Totaling $8,700