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Chapter 3: 6SE_1 (page 158)

On September 1, Big Fan of Toledo prepaid six months of rent, $3,300. Requirements 1. Record the journal entry for the September 1 payment. 2. Record the adjusting entry required at September 30. 3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances at September 30. (Ignore the Cash account.)

Short Answer

Expert verified

Answer

Journal entries are as follows:

Date

Accounts and Explanation

Debit

Credit

September 1

Prepaid Rent

$3,300

Cash

$3,300

To record payment of advance rent

Step by step solution

01

Explanation on Prepaid Rent

Prepaid rent indicates the advance amount of rent paid by the entity.

02

Explanation on Journal Entry

The advance rent payment will be recorded by debiting prepaid rent and crediting cash account by $3,300, respectively.

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