JournaldrillPrepaid rent used
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
On October 1, Willow Florist paid $7,200 in advance for six months of shop rent and debited Prepaid Rent. Record the adjusting entry on December 31.
What this exercise teaches
Monthly rent is $1,200 ($7,200 / 6), and three months (October, November and December) have been used, so $3,600 becomes Rent Expense. Prepaid Rent is credited and keeps the $3,600 for the three months still to come.
A hint if you get stuck
Find the monthly rent, count the months used through December 31, and reduce the asset by that amount.
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