Forrester Company Signed a Two-Year Lease on July 1 and Paid

Multiple Choice

Forrester Company signed a two-year lease on July 1 and paid the $17,400 total rent in advance. Forrester recorded the transaction as a debit to Prepaid Rent and a credit to Cash.
What adjusting entry should Forrester make on December 31 (no previous adjustment has been made) ?

A) Prepaid Rent 13,050
Rent Expense 13,050
B) Prepaid Rent 4,350
Rent Expense 4,350
C) Rent Expense 8,700
Prepaid Rent 8,700
D) Rent Expense 4,350
Prepaid Rent 4,350
E) None of the above