Assume That on November 1, 2019, a 3-Month Rent Payment

question 20

Multiple Choice

Assume that on November 1, 2019, a 3-month rent payment for $8,000 per month (for a total of $24,000) was made with respect to a lease that the company entered into on that date as a tenant.The company took occupancy of the rented space immediately.The lease term will expire on January 31, 2020.The $72,000 payment was recorded as a debit to Prepaid Rent on November 1, 2019.The adjusting entry on December 31, 2019, is as follows:

• A) \[\begin{array} { | c | c | r | r | }
• \hline \text { Dr. } & \text { Prepaid Rent } & \mathbf { 8 , 0 0 0 } & \\
• \hline \text { Cr. } & \text { Rent Expense } & & \mathbf { 8 , 0 0 0 } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | r | r | }
• \hline \text { Dr. } & \text { Prepaid Rent } & 16,000 & \\
• \hline \text { Cr. } & \text { Rent Expense } & & 16,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | r | r | }
• \hline \text { Dr. } & \text { Rent Expense } & \mathbf { 8 , 0 0 0 } & \\
• \hline \text { Cr. } & \text { Prepaid Rent } & & \mathbf { 8 , 0 0 0 } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | c | r | r | }
• \hline \text { Dr. } & \text { Rent Expense } & 16,000 & \\
• \hline \text { Cr. } & \text { Prepaid Rent } & & 16,000 \\
• \hline
• \end{array}\]

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Definitions:

Deficits

The amount by which a government's expenditures exceed its revenue.

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Situations in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.

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The official currency of Russia, symbolized as RUB, used for all financial transactions within the country.

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A fall in the price of a nation’s currency relative to foreign currencies.