On January 1 the Don Harry Gallery paid $10,000 to Fairy Realty for 2 year's advance rent beginning January 1. If financial statements are prepared on December 31, the adjusting entry to be made by the Don Harry is O debit Rent Expense, $1,000; credit Prepaid Rent, $3,000. debit Rent Expense, $5,000; credit Prepaid Rent. $5,000. Odebit Rent Expense, $3,000; credit Prepaid Rent, $1,000. Odebit Prepaid Rent, $2,000; credit Rent Expense, $2,000.