Use the following information to answer the four questions t

Use the following information to answer the four questions that follow On Apr 1, 2007, KA Company paid $36,000 to lease office space for the next twelve months. KA Company debited a temporary account on April 1, 2007 when the cash was paid. KA Company adjusts its books on December 31 each year 18. The journal entry on April 1, 2007 would include a debit to which account? a. Retained Earnings b. Rent Expense c. Prepaid Rent d. Cash c. Accounts Payable 19. The adjusting journal entry on December 31, 2007 would include a debit to which account? a. Retained Earnings b. Rent Expense c. Prepaid Rent d. Cash c. Accounts Payable 20. The adjusting journal entry on December 31, 2007 would include a credit to which account? a. Retained Earnings b. Rent Expense c. Prepaid Rent d. Cash c. Accounts Payable 21. The amount of the adjusting journal entry on December 31, 2007 is:

Solution

EXplanation: When rent will be paid, it will be first debited with Prepaid Rent and at the end of the year adjustement will be made and accordingly Rent Expense will be debited on the basis of no. of month, and balance of Prepaid rent account will be reuced by credit it account..

18.(c) Prepaid Rent.

19( b) Rent Expense

20 (c) prepaid Rent

21 Ther amount of the adjusting entry on 31 Dec 2017 will be:-

( $36000X 1/12 Month X 9)= $27000

Answer will be (c) Prepaid Rent.