Gates Accounting Services (GAS), a sole proprietorship, entered into a new 18-month office space…

 
   

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Gates Accounting Services (GAS), a sole proprietorship, entered into a new 18-month office space contract on September 15, year 1, paying the full $ 36,000 rent contract to the real estate company on that day (lease expiration March 15, year 3). Assuming that GAS reports on a calendar year-end and that journal entries are posted on a quarterly basis (only), what adjusting journal entry (if any) would be made to the prepaid rent account prior to closing the December 31, year 1, financial statements? a. Credit prepaid rent $ 6,000 b. Credit prepaid rent $ 7,000 c. Debit prepaid rent $ 8,000 d. No adjusting entry made View Solution:
Gates Accounting Services GAS a sole proprietorship entered into a