Dental Solutions Leased a Building for 2 Years,effective May 1,20X3 $\begin{array}{lcc}\text { Rent Expense } & 2,000 & \\\text { Prepaid Rent } & & 2,000 \\\end{array}$

Multiple Choice

Dental Solutions leased a building for 2 years,effective May 1,20X3.The lease was considered an operating lease.The lease required that Dental Solutions make payments of $6,000 every 3 months,beginning on May 1,20X3.The first payment covers the period of May 1,20X3 through July 31,20X3.Assume an interest rate of 12%.What is the journal entry to be made by Dental Solutions on May 31,20X3?

A) $\begin{array}{lcc}\text { Rent Expense } & 2,000 & \\\text { Prepaid Rent } & & 2,000 \\\end{array}$

B) $\begin{array}{lccc}\text { Rent Expense } & 2,000 & \\\quad \text { Cash } & & 2,000 \\\end{array}$

C) $\begin{array}{lccc}\text { Rent Expense } & 4,000 & \\\text { Prepaid Rent } & & 4,000 \\\end{array}$

D) $\begin{array}{lccc}\text { Prepaid Rent } & 2,000 & \\\quad \text { Rent Expense } & & 2,000 \\\end{array}$

E) $\begin{array}{lccc}\text { Prepaid Rent } & 4,000 & \\\text { Rent Expense } & & 4,000\end{array}$