Assume That on November 1, 2019, a 3-Month Rent Payment

Multiple Choice

Assume that on November 1, 2019, a 3-month rent payment for $8,000 per month (for a total of $24,000) was made with respect to a lease that the company entered into on that date as a tenant.The company took occupancy of the rented space immediately.The lease term will expire on January 31, 2020.The $72,000 payment was recorded as a debit to Prepaid Rent on November 1, 2019.The adjusting entry on December 31, 2019, is as follows:

A) $$\begin{array} { | c | c | r | r | } \hline \text { Dr. } & \text { Prepaid Rent } & \mathbf { 8 , 0 0 0 } & \\\hline \text { Cr. } & \text { Rent Expense } & & \mathbf { 8 , 0 0 0 } \\\hline\end{array}$$
B) $$\begin{array} { | c | c | r | r | } \hline \text { Dr. } & \text { Prepaid Rent } & 16,000 & \\\hline \text { Cr. } & \text { Rent Expense } & & 16,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | c | r | r | } \hline \text { Dr. } & \text { Rent Expense } & \mathbf { 8 , 0 0 0 } & \\\hline \text { Cr. } & \text { Prepaid Rent } & & \mathbf { 8 , 0 0 0 } \\\hline\end{array}$$
D) $$\begin{array} { | c | c | r | r | } \hline \text { Dr. } & \text { Rent Expense } & 16,000 & \\\hline \text { Cr. } & \text { Prepaid Rent } & & 16,000 \\\hline\end{array}$$