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16 July, 05:49

On January 2, Dog Mart prepaid $18,480 rent for the year and recorded the prepayment in an asset account. Prepare the January 31 adjusting entry for rent expense.

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  1. 16 July, 06:10
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    The January 31 adjusting entry for rent expense:

    Debit Rent expense $1,540

    Credit Prepaid rent $1,540

    Explanation:

    On January 2, Dog Mart prepaid $18,480 rent for the year. Dog Mart recorded the entry:

    Debit Prepaid rent $18,480

    Credit Cash $18,480

    Rent expense per month of the year:

    $18,480/12 = $1,540

    On January 31, the last day of the following 1 month, the company records an adjusting entry:

    Debit Rent expense $1,540

    Credit Prepaid rent $1,540
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Home » Business » On January 2, Dog Mart prepaid $18,480 rent for the year and recorded the prepayment in an asset account. Prepare the January 31 adjusting entry for rent expense.
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