Final answer:
Three months of rent were initially prepaid for $7200, and after one month, $2400 is expensed, leaving $4800 as prepaid rent for the remaining two months.
Step-by-step explanation:
When analyzing the prepaid rent transaction, it is essential to adjust the accounting records at the end of the period to reflect the expense that has occurred. Initially, $7200 was paid for three months of rent on September 1. As one month has expired by September 30, we need to recognize one month's rent as an expense, leaving two months still prepaid. To calculate the rent expense for one month, divide the total prepaid amount by the number of months prepaid: $7200 ÷ 3 months = $2400 per month. Therefore, the rent expense for September is $2400, and the remaining prepaid rent is $4800 ($7200 - $2400).
To analyze the situation, we need to break down the information given. Three months of rent were prepaid on September 1 for $7200. However, only one month has expired by September 30, so there are still two months left prepaid. To find the value of two months, we can set up a proportion using the given information: 3 months is to $7200 as 2 months is to x. Cross-multiplying and solving for x, we find that 2 months is equal to $4800. Therefore, at September 30, there are 2 months of rent prepaid, totaling $4800.