Question

On December​1, Mountain and Meadow Tree Service prepaid $6,600 for six​ months' rent. Give the adjusting entry to record rent expense at December 31. Include the date of the entry and an explanation. Then post all amounts to the two accounts​ involved, and show their balances at December 31. Mountain and Meadow adjusts the accounts only at December ​31, the end of its fiscal year.

Answer 1

Mountain and Meadow Tree services prepaid rent $6,600 on December 1 for 6 months rent.

Note for asset and expense accounts when they increase you debit and when they reduce you credit.

The first entry

On December 1 : Debit Prepaid Rent account for $6,600

Narration: Prepaid rent for 6 months

Balance: $6,600

Since the rent is for 6 months, monthly payment will be= 6,600/6= $1,100

On December 31 post the following adjusting entries

December 31 : Debit Rent Expense $1,100

Narration: Rent for December

Balance: $1,100

December 31 : Credit Prepaid Rent $1,100

Narration: Rent for December

Balance: $5,500