The unadjusted Prepaid Rent is $6,000. Prepaid Rent in the balance sheet column is $5,000. Which of the following entries would have caused this difference?

Question

BlackTom AI · Accepted Answer

Prepaid rent is an asset; when part of it expires (becomes rent expense), you credit the asset and debit Rent Expense. That reduction in Prepaid Rent from $6,000 to $5,000 is a $1,000 decrease, so the worksheet must show a $1,000 credit to Prepaid Rent in the adjustments column.

Step-by-step reasoning and calculations:
1. Identify the change: Unadjusted Prepaid Rent = $6,000. Prepaid Rent on the balance sheet column = $5,000. Difference = $6,000 − $5,000 = $1,000 (amount expired).
2. Determine the required adjusting entry: To reflect expired prepaid rent, record Rent Expense (debit) and reduce Prepaid Rent (credit). The journal entry is:
   - Debit Rent Expense $1,000
   - Credit Prepaid Rent $1,000
3. Map this to the worksheet: In the adjustments column you would show a $1,000 debit to Rent Expense (income statement side) and a $1,000 credit to Prepaid Rent (balance sheet side). After applying the $1,000 credit adjustment to the $6,000 unadjusted Prepaid Rent, the adjusted (balance sheet column) Prepaid Rent equals $5,000.

Why the correct answer is correct:
- Option c explicitly states a $1,000 credit to Prepaid Rent in the worksheet's adjustments column, which directly reduces the asset from $6,000 to $5,000 and pairs with a $1,000 debit to Rent Expense as required.

Why the other options are incorrect:
- a (a $1,000 debit to Prepaid Rent): a debit would increase the asset to $7,000, not reduce it to $5,000.
- b (a $1,000 credit to Rent Expense): crediting Rent Expense would decrease expense, which is the opposite of recording expired prepaid rent.
- d (a $1,000 credit to Rental Revenue): affects revenue, not the Prepaid Rent asset, and would not produce the observed decrease in Prepaid Rent.

Conclusion: The correct entry is c. a $1,000 credit entry to Prepaid Rent in the worksheet's adjustments column.

The unadjusted Prepaid Rent is $6,000. Prepaid Rent in the balance sheet column is $5,000. Which of the following entries would have caused this difference?单项选择题

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