Question

Select all that apply On November 1, 2019, Movers, Inc., paid $24,000 for 2 years' rent beginning on November 1 (assume rent is the same amount each month). Movers' year-end financial statements as of December 31, 2019 will show: (Select all that apply.) Rent expense of $2,000 Rent expense of $1,000 Rent expense of $24,000 Prepaid rent of $22,000 Prepaid rent of $24,000

Answer 1

Rent expense of $2,000

Prepaid rent of $22,000

Step-by-step explanation:

Since we were told that On November 1,2019 Movers Inc., paid the amount of $24,000 for a 2 years' rent which will start or begin on November 1 which means Movers' year-end financial statements as of December 31,2019 will show:

Rent expense of $2,000

Prepaid rent of $22,000

The rent expense of $2,000 is calculated as

(1÷12*$24,000)=$2,000

The prepaid rent of $22,000 is calculated as

$24,000-$2,000

$22,000