Question
On September 1, 2024, Real Estate Professionals, Inc. paid $5,000 in advance for an eight-month rental space covering the period of September 1, 2024
On September 1, 2024, Real Estate Professionals, Inc. paid $5,000 in advance for an eight-month rental space covering the period of September 1, 2024 through April 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2025 would include a OA. debit of $2,500 to Rent Expense OB. credit of $2,500 to Rent Expense OC. debit of $5,000 to Cash OD. credit of $5,000 to Prepaid Rent
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