The CHS Company paid $60,000 cash to its landlord on November 1, 2019 for rent covering the six-month period from November 1, 2019 through April 30, 2020. The books are adjusted only at year-end. Which of the following does not correctly describe the effect on CHS Company's financial statements of the December 31, 2019 adjusting entry?

Multiple Choice

• Rent expense increases $20,000.

• Stockholders' equity increases $20,000.

• Prepaid rent decreases $20,000.