Final answer:
The correct adjusting entry depends on the specific scenario related to Rock Refinishing Service. It could be for prepaid rent, prepaid advertising, supplies, or refinishing services, and it generally involves adjusting entries to recognize expenses incurred or revenues earned.
Step-by-step explanation:
Without specific details about the operations of Rock Refinishing Service, it's challenging to determine the precise adjusting entry necessary. However, generally, if the prepaid rent relates to rent that the company has paid in advance and is expiring during the current accounting period, then an adjusting entry for prepaid rent would need to be recorded to recognize the rent expense incurred during the period. Similarly, if the scenario involves prepaid advertising that has been utilized in the period, then an adjusting entry for prepaid advertising is required to recognize the advertising expense. For supplies consumed during the period, an adjusting entry for supplies is recorded to reflect the expense and reduce the amount of supplies on hand. Lastly, if the question pertains to revenue that has been earned but not yet recorded, an adjusting entry for refinishing services would be necessary to recognize the earned revenue.
Each adjusting entry would typically involve a debit to an expense account, such as rent expense, advertising expense, or supplies expense, and a credit to the corresponding prepaid asset account or a debit to an accounts receivable and a credit to service revenue for recognized revenue.