Suppose Macomb, a specialty clothing store, rents space at a local mall for one year, paying $20,400 ($1,700 per month) in advance on October 1. The balance of Prepaid Rent at the beginning of the year is $0.

Determine the accounts to be adjusted on December 31, the amount of the adjustment, and the ending balances. Assume no adjustments were previously made during the year.

Note: Amounts to be deducted should be indicated with a minus sign.