In December 20X1, Julia paid for January's 20X2's rentahead of time. Assume that Julia's business has aDecember 31 year end. In what year does she report rentexpense?O Both yearsO 20X2O Neither yearO 20X1

Answered: In what year does she report rent

Business

Finance

In what year does she report rent

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

In December 20X1, Julia paid for January's 20X2's rent
ahead of time. Assume that Julia's business has a
December 31 year end. In what year does she report rent
expense?
O Both years
O 20X2
O Neither year
O 20X1

Expert Solution

Step 1 Introduction

Prepaid expense means paying an amount in advance before receiving goods or services. It is should be recorded as asset in the balance sheet at the time of payment & recognised in income statement when they actually received goods or service.

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