The $5000 rent deposit relates to ABC move to a new apartment in April 2018 and is refundable at the end of the lease. Ethan paid a deposit since the lessor generously offered free rent for 12 months of the lease. The lease is for 60 months, and $0 for the first 12 months and $2500 per month thereafter. Rent expense for this lease was not recorded since nothing was paid during 2018 other than the deposit. Margeret the accountant thinks the prepaid expense is correct but would like to be confirmed

Prepaid Balance :

2018 Rent Deposit. $5000