QUESTION 41 On December 1 2012 Jenna Company paid three mont

QUESTION 41 On December 1, 2012, Jenna Company paid three months\' rent for office space for December 2012, January 2013 and February 2013 totaling $21,000. The payment was originally recorded by a debit to a real account. Jenna\'s required adjusting entry at December 31, 2012 would include: a debît to Rent Payable. a debýt to Prepaid Rent. a ctedit to Rent Payable. a debjt to Rent Expense. none of the above

Solution

Correct answer is A debit to Prepaid Rent.

As rent paid on December 1 2012, for the next three months but the payment was originally debit to a real account, but actually the amount belongs to prepaid rent head and adjusting entry should include a debit to prepaid rent and a credit to real account to net off the effect.