Ask Question
BusinessBusiness
15 August, 15:19

On July 1, 2018, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2018 through December 2019. What adjusting entry should Charlie Co. record on December 31, 2018?

+4
Answers (1)
  1. 15 August, 17:59
    0
    Dr Cr

    Rent Expense $6,000

    Prepaid Rent $6,000

    Explanation:

    Prepaid Expenses are the expenses of a firm which are not incurred but paid in advance. So they are recorded as assets and are expensed out when incurred.

    Initial entry recorded by Charlie Co on July 1, 2018 would have been as:

    Dr Cr Prepaid Rent $18,000 Cash $18,000

    Lets calculate rent expense incurred for 6 months from July 1, 2018 to December 31, 2018

    Rent Expense = ($18,000/18) 6 = $6,000

    On December 31, 2018 Charlie Co would record adjusting entry for 6 months for rent expense incurred from July 1, 2018 to December 31, 2018 as:

    Dr Cr Rent Expense $6,000 Prepaid Expense $6,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On July 1, 2018, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2018 through December 2019. What ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Kim Airedale, a manager of Waggers, Inc., was reviewing the water bills of a dog daycare and spa. She determined that its highest and lowest bills of $3600 and $2800 were incurred in the months of May and November, respectively.
Answers (1)
A company's total marketing communications mix consists of a specific blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to communicate customer value and build customer
Answers (1)
Which of the following characteristics apply to taxable fringe benefits? (Check all that apply.) * The cost of the taxable fringe benefit is deductible to the employer, not the value of the benefit to the employee.
Answers (1)
Which part of the web page would provide information about people who contributed to it? A. Graphics B. Headings C. Content D. Credits
Answers (1)
Coordination losses are often driven by: Select one: a. process gain b. staff validity c. hierarchical sensitivity d. scout activity e. production blocking
Answers (1)
New Questions in Business
Purchase discounts are the same as trade discounts true or false
Answers (1)
What assets should be amortized using the straight-line method? A. Intangible assets with definite lives B. Intangible assets with indefinite lives C. Natural resources D. All of the above
Answers (1)
In The Wealth of Nations, Adam Smith discussed what has come to be known as the "diamond and water paradox" "Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it.
Answers (1)
Honda Motor Company is considering offering a $ 1 comma 800 rebate on its minivan, lowering the vehicle's price from $ 29 comma 400 to $ 27 comma 600.
Answers (1)
State the generally accepted accounting principle applicable to balance sheet valuation of each of the following assets. (a) Trade accounts receivable. (b) Land. (c) Inventories. (d) Trading securities (common stock of other companies).
Answers (1)
Home » Business » On July 1, 2018, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2018 through December 2019. What adjusting entry should Charlie Co. record on December 31, 2018?
Sign Up Forgot Password?