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On 1 July the Winter Shoe Store paid $6,000 to Ace Realty for 6 month’s rent...

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Accounting

On 1 July the Winter Shoe Store paid $6,000 to Ace Realty for 6month’s rent beginning 1 July. Prepaid Rent was debited for thefull amount. If financial statements are prepared on 31 July, theadjusting entry to be made by the Winter Shoe Store is:

Select one:

a. Debit Rent expense, $6,000; Credit Prepaid rent, $6,000

b. Debit Prepaid rent, $1,000; Credit Rent expense, $1,000

c. Debit Rent expense, $1,000; Credit Prepaid rent, $1,000

d. Debit Rent expense, $6,000; Credit Prepaid rent, $6,000

e. None of the above

Answer & Explanation Solved by verified expert
4.0 Ratings (641 Votes)
Answer Option c Debit Rent expense 1000 Credit Prepaid rent 1000 Rent is paid for 6 months on 1st july financial statements are prepared on 31 July Thus Rent expense will be considered only for the month    See Answer
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