On January 1, Renoir Associates paid $6,400 for six months of rent. Assume no other adjusting entries have been done this fiscal year. What would the adjusting entry be on March 31?
A) Debit Rent Expense $1,067, credit Prepaid Rent $1,067
B) Debit Rent Expense $1,067, credit Cash $1,067
C) Debit Rent Expense $3,200, credit Prepaid Rent $3,200
D) Debit Rent Expense $3,200, credit Cash $3,200
C) Debit Rent Expense $3,200, credit Prepaid Rent $3,200
Explanation: Adjust for 3 of 6 month's rent being used: amount paid × 3/6 = adjustment amount. Ex: $6,400 × 3/6 = $3,200 expense.
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