On September 1,2016,Joy Company paid $6,000 in advance for an eight-month rental space covering the period of September,2016 through April 2017.The deferred expense was initially recorded as an asset.Joy Company makes adjusting entries once a year at year-end.The adjusting entry on December 31,2016 would include a ________.
A)debit of $6,000 to Cash
B)credit of $6,000 to Prepaid Rent
C)debit of $3,000 to Rent Expense
D)credit of $3,000 to Rent Expense

Question

Quizplus · Accepted Answer

C)Prepaid Rent on December 31,2014 = $6,000 × 4/8 = $3,000

On September 1,2016,Joy Company Paid $6,000 in Advance for an Eight-Month