Question

knowledge check 01 a company is in its first month of operations. on january 1, the company pays 3 months of rent in advance for $2,100. what adjusting entry would be made at the end of january? post the adjusting entry for the scenario provided. note: if no entry is required for a transaction/event, select
o journal entry required\ in the first account field. view transaction list journal entry worksheet 1 record the adjusting entry for rent used during the month of january. note: enter debits before credits. date general journal debit credit january 31

Explanation:

Step1: Calculate monthly rent expense

The company paid $3$ - month rent in advance of $2100$. So the monthly rent expense is $\frac{2100}{3}=700$.

Step2: Determine adjusting - entry accounts

Pre - paid rent (an asset) decreases and rent expense (an expense) increases. We debit rent expense to record the expense incurred and credit pre - paid rent to reduce the asset balance.

Answer:

Date	General Journal	Debit	Credit
	Pre - paid Rent		700