On September 1, 2024, Real Estate Professionals, Inc. paid $6,000 in advance for an eight−month rental space covering the period of September 1, 2024 through April 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year−end. The adjusting entry on December 31, 2025 would include a ________. A. debit of $3,000 to Rent Expense B. credit of $3,000 to Rent Expense C. credit of $6,000 to Prepaid Rent D. debit of $6,000 to Cash

On September 1, 2024, Real Estate Professionals, Inc. paid $6,000 in advance for an eight−month rental space covering the period of September 1, 2024 through April 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year−end. The adjusting entry on December 31, 2025 would include a ________. A. debit of $3,000 to Rent Expense B. credit of $3,000 to Rent Expense C. credit of $6,000 to Prepaid Rent D. debit of $6,000 to Cash

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On September 1, 2024, Real Estate Professionals, Inc. paid

$6,000

in advance for an

eight−month

rental space covering the period of September 1, 2024 through April 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at

year−end.

The adjusting entry on December 31, 2025 would include a ________.

debit of

$3,000

to Rent Expense

credit of

$3,000

to Rent Expense

credit of

$6,000

to Prepaid Rent

debit of

$6,000

to Cash

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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