Question

b. ashton it services prepaid two months of rent on december 1. (assume the prepaid rent balance as shown on the unadjusted trial balance represents the two months of rent prepaid on december 1.)

date	accounts and explanation	debit	credit
adjustment b

Explanation:

Step1: Identify the adjustment

As of December 31, one month of the prepaid rent (for December) has been used. So we need to recognize rent expense and reduce prepaid rent.

Step2: Determine accounts and amounts

• Debit Rent Expense (to recognize the expense for December).
• Credit Prepaid Rent (to reduce the prepaid asset by one month's rent). Assume the total prepaid rent for two months is \( \text{Total Prepaid} \), then one month's rent is \( \frac{\text{Total Prepaid}}{2} \). But since we just need the journal entry structure:

Date	Accounts and Explanation	Debit	Credit
	Prepaid Rent		\( \frac{\text{Total Prepaid}}{2} \)
	(To record rent expense for December)

Answer:

The journal entry on December 31 (Adjustment B) is to debit Rent Expense and credit Prepaid Rent for one - month's rent amount (calculated as total prepaid rent divided by 2). The specific amounts depend on the total prepaid rent, but the accounts are Rent Expense (debit) and Prepaid Rent (credit).