Powell Co. is a retailing business operating in the southeastern US. Powells fiscal year-end is December 31, and it prepares financial statements just once a year, at year-end. The company has already recorded mostof its transaction and adjusting entries for the year ended December 31, 2018. The resulting trial balance follows:

Account	Debit	Credit
Cash	$ 379,975
Accounts Receivable	608,230
Allowance for Doubtful Accounts		$ 3,297
Inventory	317,810
Prepaid Insurance	234,972
Land	168,030
Buildings	836,928
Accumulated Depreciation Buildings		209,232
Construction in Progress	411,000
Equipment	392,752
Accumulated Depreciation Equipment		122,735
Notes Receivable	31,825
Discount on Notes Receivable		4,028
Accounts Payable		414,815
Notes Payable		829,350
Common Stock ($5 par)		217,500
Retained Earnings		905,625
Dividends	97,600
Sales Revenue		4,821,780
Advertising Expense	85,319
Cost of Goods Sold	2,974,065
Insurance Expense	42,931
Interest Expense	31,420
Rent Expense	20,160
Salaries and Wages Expense	691,705
Utilities Expense	203,640
	$7,528,362	$7,528,362

Omitted Adjustment

(1) On May 1, 2018, Powell signed a 5-year lease to rent additional warehouse space. On that date, Powell prepaid the first 18 months of rent totaling $20,160. The prepayment covers the period May 2018 through October 2019. Powells bookkeeper recorded the prepayment into the Rent Expense account. Give the adjusting entry needed when a company uses an expense approach to record a payment in advance.

Instructions

Prepare the journal entries to record the omitted adjustment for (1)