Brief Exercise 3-7 (Static) Record the adjusting entry for prepaid rent (LO3-3)

Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $25,200 ($2,100/month) in advance on October 1.

Required:

1.&2. Record the necessary entries in the Journal Entry Worksheet below.

3. Calculate the year-end adjusted balances of Prepaid Rent and Rent Expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).