The Balance in the Prepaid Rent Account Before Adjustment at the End

question 74

Multiple Choice

The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is

• A) debit Rent Expense, $8,000; credit Prepaid Rent, $8,000
• B) debit Prepaid Rent, $24,000; credit Rent Expense, $8,000
• C) debit Rent Expense, $24,000; credit Prepaid Rent, $8,000
• D) debit Prepaid Rent, $8,000; credit Rent Expense, $8,000

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Definitions:

Quarterly Cash Payments

Regular financial distributions made by a company to its shareholders every three months.

Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on part of the company's assets and earnings.

Regular Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits on a fixed schedule.

Hedge Funds

Investment funds that employ various strategies to earn active returns for their investors, including leveraging, derivatives, and short selling.