Final answer:
The balance of the Prepaid Rent account for Extreme Cruises on September 1, 2016, after prepaying for 3 months, would be $1,500, which represents the remaining amount for the last month.
Step-by-step explanation:
The student has asked about the balance in the Prepaid Rent account for Extreme Cruises after two months have passed since the prepayment of rent. Since the company prepaid $4,500 for 3 months on July 1, 2016, we need to calculate the expense for two months to find the remaining balance as of September 1, 2016.
To calculate the monthly rent, we divide the total prepayment by the number of months ($4,500 ÷ 3), which gives us $1,500 per month. For two months (July and August), the total rent used would be $1,500 × 2, which is $3,000. Therefore, the balance in the Prepaid Rent account as of September 1 would be the original amount minus the rent used ($4,500 - $3,000), resulting in a balance of $1,500.