The balance in the Prepaid Rent account before adjustment at the end of the year on December 31 is $12,000, which represents 12 months rent paid on March 01, 2020. The adjusting entry required on December 31, 2020 is Debit Rent Expense, $2,000; credit Prepaid Rent, $2,000. Debit Prepaid Rent, $10,000; credit Rent Expense, $10,000. Debit Rent Expense, $10,000; credit Prepaid Rent, $10,000. Debit Prepaid Rent. $2,000: credit Rent Expense, $2,000