S3-12. (Learning Objective 3: Adjust the accounts for prepaid rent) Due to the terms ofits lease, Hawke Services, Inc., pays the rent for its new office space in one annual payment of$26,800 on August 1, 2018. The lease covers the period of August 1, 2018, through July 31,2019. Hawke Services has a year-end of December 31. Assume that Hawke Services had noother prepaid rent transactions, nor did it have a Prepaid Rent beginning balance in 2018. Givethe journal entries that Hawke Services would make for (a) the annual rent payment of $26,800on August 1 and (b) the adjusting entry for rent expense on December 31, 2018. What is thebalance of Prepaid Rent at December 31, 2018?
S3-12. (Learning Objective 3: Adjust the accounts for prepaid rent) Due to the terms of
its lease, Hawke Services, Inc., pays the rent for its new office space in one annual payment of
$26,800 on August 1, 2018. The lease covers the period of August 1, 2018, through July 31,
2019. Hawke Services has a year-end of December 31. Assume that Hawke Services had no
other prepaid rent transactions, nor did it have a Prepaid Rent beginning balance in 2018. Give
the
on August 1 and (b) the
balance of Prepaid Rent at December 31, 2018?
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