Question 32 2 points at the end of the year is 8000 and repr

Question 32 2 points at the end of the year is $8,000 and represents three months rent paid on December 1. The adpsting requred on December 37 A debit Prepaid ent$3.000 creit entExpense $3000 8dedit Preid Rn.ox cipense 6.00 debit Rent Expse s 000 crit Prepaid Rent $000 D debit R Expense5300 credit Prepaid Rent 3000

Solution

Answer is D

Working:
The balance in the prepaid rent acount is $9,000 .
This amount is paid on December 1 , for three months.
Rent for each month is $3,000 ($9,000 / 3)
The entry recorded at the time of payment will be
Account title	Debit	Credit
Prepaid rent	9000
Cash		9000
At December 31, rent expense to be charged is $3,000 (rent for December)
The balance of $6,000 is for January and February which should be
reflected in the prepiad rent account.
Therefore the entry will be
Account title	Debit	Credit
Rent expense	3000
Prepaid rent		3000