The balance in the prepaid rent account before adjustment at the end of the year is $12,444, which represents 12 months' rent paid on December 1. The adjusting entry required on December 31 is debit Prepaid Rent, $1.037, credit Rent Expense, $1,037 debit Rent Expense. $1.037 credit Prepaid Rent, $1037 debit Prepaid Rent. $11,407, credit Rent Expense. $1.037 debit Rent Expense $11.407 credit Prepaid Rent, $1.037