If an Entity Paid $200 for Two Months' Rent in Advance

question 4

Multiple Choice

If an entity paid $200 for two months' rent in advance on 1 June and recorded it all as prepaid rent on that date, which of the following would be the necessary adjusting entry at 30 June?

• A) Debit rent expense $100 and credit prepaid rent $100
• B) Debit prepaid rent $100 and credit rent expense $100
• C) Debit rent expense $200 and credit prepaid rent $200
• D) Debit prepaid rent $200 and credit rent expense $200

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Definitions:

Quadrupled

Quadrupled in amount or worth.

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Billions

A numerical value equal to one thousand million (1,000,000,000) in the short scale used by most English-speaking countries.

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The act of marketing and selling products or services outside one's own country.