On September 1, 2014, Joy Company Paid $8,000 in Advance

question 19

Multiple Choice

On September 1, 2014, Joy Company paid $8,000 in advance for an 8-month rental space covering the period of September, 2014 through April, 2015. The prepaid expense was initially recorded as an asset. Joy makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2014 would include a:

• A)debit of $8,000 to Cash.
• B)credit of $8,000 to Prepaid Rent.
• C)debit of $4,000 to Rent Expense.
• D)credit of $4,000 to Rent Expense.

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