John Company pays four months rent at $800 per month on December 1 for December, January, February and March. John records this with a debit to prepaid rent and a credit to cash for $3,200. When preparing to produce financial statements for the year ended 12/31, Johns accountant erroneously believed the entire $3,200 was originally recorded as a debit to rent expense and made the adjustment based on that assumption. Which of the following is true?

a.)Rent expense is understated $3,200 b.)Prepaid rent is understated $3,200 c.)Rent expense should be $2,400 for December d.)Prepaid rent should be $800 on December 31 e.)None of the above are true