Required information

On January $1,$ a company pays one year of rent in advance for $$12,000($ $$1,000$ per month$).$ On January $31,$ the end$-$ofmonth adjustment results in an:

Multiple Choice

Increase in Rent Expense of $$1,000$; Decrease in Prepaid Rent of $$1,000$

Increase in Rent Expense of $$12,000$; Decrease in Prepaid Rent of $$12,000$

Increase in Prepaid Rent of $$1,000$; Decrease in Cash of $$1,000$

Increase in Rent Expense of $$1,000$; Decrease in Cash of $$1,000$