Question 3

Sheffield Corp. paid cash of $147000 on June 1, 2017 for one year's rent in advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2017 adjusting entry is

a)debit Prepaid Rent and credit Cash, $61250.

b)debit Prepaid Rent and credit Rent Expense, $85750.

c)debit Rent Expense and credit Prepaid Rent, $85750.

d)debit Prepaid Rent and credit Rent Expense, $61250.