Question

On Sept 1, the Mini-Mite Store paid $12,000 to the Maxi-Mall Co. for 3 months rent starting Sept 1. Prepaid Rent was debited for the $12,000. If financial statements are prepared on Sept 30, the appropriate adjusting journal entry to make on Sept 30 would be

Answer 1

$4,000 debit to Rent Expense

$4,000 credit to Prepaid Rent.

Step-by-step explanation:

Date Account Title and Explanation Debit Credit

Sept 30 Rent Expenses $4,000

($12,000 * 1/3)

Prepaid Rent $4,000

(Been an adjusting entry to record the rent expenses)