Question

On April 1, Larken Corp. pays $36,000 for 3 years of rent. The transaction is appropriately recorded as prepaid rent. The adjusting entry on December 31, of the same year, will require a (Select all that apply.)

Answer 1

DR Prepaid rent

CR Rent expense

Step-by-step explanation:

Based on the information given about Larken Corp in which we were been told that Larken Corp pays the rent amount of $36,000 for conservatively 3 years.

Hence since the transaction that occured is recorded as prepaid rent, this means that the adjusting entry on December 31 will be:

DR Prepaid rent

CR Rent expense