On September 1, 2014, Joy Company Paid $8,000 in Advance

Multiple Choice

On September 1, 2014, Joy Company paid $8,000 in advance for an 8-month rental space covering the period of September, 2014 through April, 2015. The prepaid expense was initially recorded as an asset. Joy makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2014 would include a:

A) debit of $8,000 to Cash.
B) credit of $8,000 to Prepaid Rent.
C) debit of $4,000 to Rent Expense.
D) credit of $4,000 to Rent Expense.