Sofia pays rent in advance for her business. Her trial balance at the business year-end, 31 December 2015, shows a figure of 8,750 for rent. During 2015, she had paid rent of 1,875 for the three months ended 29 February 2016. Her financial statements for the year ended 31 December 2016 should show:

a)The rent expense deducted in arriving at the profit or loss for the year would be 7,500 and a pre-payment of 1,250 would be included on the statement of financial position.

b)The rent expense deducted in arriving at the profit or loss for the year would be 8,125 and a pre-payment of 625 would be included on the statement of financial position.

c)The rent expense deducted in arriving at the profit or loss for the year would be 8,750 and no pre-payment for rent would be included on the statement of financial position.

d)The rent expense deducted in arriving at the profit or loss for the year would be 9,375 and an accrual of 625 for rent owing would be shown on the statement of financial position.