Question 42

At the end of the year, the balance in the Prepaid Rent account, before adjustments, is $12,000 and represents three months rent starting on November 1. The adjusting entry required on December 31, assuming adjusting entries have not previously been made, is

Select one:

a. debit Rent Expense, $12,000; credit Prepaid Rent, $12,000

b. debit Prepaid Rent, $4,000; credit Rent Expense $4,000

c. debit Rent Expense, $8,000; credit Prepaid Rent, $8,000

d. debit Prepaid Rent, $8,000; credit Rent Expense, $8,000