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April 24, 2015

Homework Help: Accounting

Posted by Samantha on Tuesday, February 27, 2007 at 3:13pm.

I need help with a problem involving adjusting entries. It is involving rent expense and prepaid rent.

Here is the information I am given on the Unadjusted Trial Balance, Dec. 31, 2005:
Prepaid studio rent: 2,500
Studio rent expense: 11,250

The data says, "The studio pays rent quarterly (every 3 months). The last payment was made November 1, 2005. The next payment will be made early in February 2006."

I know I have to put a debit towards the rent expense and a debit towards prepaid studio rent - but I'm not sure what values to put and what explanation I should put for it.

Thanks! :)

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