knowledge check 01 a company is in its first month of operations. on january 1, the company pays 3 months of…

knowledge check 01 a company is in its first month of operations. on january 1, the company pays 3 months of rent in advance for $2,100. what adjusting entry would be made at the end of january? post the adjusting entry for the scenario provided. note: if no entry is required for a transaction/event, select \no journal entry required\ in the first account field. journal entry worksheet record the adjusting entry for rent used during the month of january. note: enter debits before credits. date general journal debit credit january 31

knowledge check 01 a company is in its first month of operations. on january 1, the company pays 3 months of rent in advance for $2,100. what adjusting entry would be made at the end of january? post the adjusting entry for the scenario provided. note: if no entry is required for a transaction/event, select \no journal entry required\ in the first account field. journal entry worksheet record the adjusting entry for rent used during the month of january. note: enter debits before credits. date general journal debit credit january 31

Answer

Explanation:

Step1: Calculate monthly rent expense

The company paid $2,100 for 3 - month rent in advance. So the monthly rent expense is $\frac{2100}{3}=700$.

Step2: Determine the adjusting - entry accounts

Prepaid rent (an asset) decreases and rent expense (an expense) increases. We debit rent expense to recognize the expense for the month and credit prepaid rent to reduce the prepaid amount.

Answer:

Date General Journal Debit Credit
January 31 Rent Expense 700
Prepaid Rent 700