Volksauto Company signed a two-year lease on July 1, 2016, and paid the $69,600 total rent in advance. Volksauto recorded the transaction as a debit to Prepaid Rent and a credit to Cash. What adjusting entry should Volksauto make on December 31, 2016 (no previous adjustment has been made)?

Select one:

A.

Prepaid Rent

17,400

Rent Expense

17,400

B.

Prepaid Rent

52,200

Rent Expense

52,200

C.

Rent Expense

17,400

Prepaid Rent

17,400

D.

Rent Expense

34,800

Prepaid Rent

34,800