Q16SE_2 - Horngren'S Financial And Managerial Accounting

Question

On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.

Step-by-Step Solution

Answer

Date	Account and Explanation	Debit	Credit
March 31, 2019	Rent Expense	$15,000
	Prepaid Rent		$15,000
	To record rent expense

Step-by-Step Solution Step 1: Explanation of Adjusting Entry

Adjusting entry are made at the end of the year to record accrued revenues and expenses of the entity.

Step 2: Explanation of Entry

On March 31, 2019, rent expense will be recorded by debiting rent expense and crediting prepaid rent by $15,000.