Question

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

T-accounts are as follows:

Prepaid Rent
Sep.1	3,300	550	Sep.30
Bal.	2,750

Rent Expense
Sep. 30	550
Bal.	550

Step-by-step solution

Step-by-Step-SolutionStep 1: Explanation on Prepaid Rent

Prepaid rent refers to the advance amount of rent paid. It has a normal debit balance.

Explanation on T-account

The ending balance of prepaid rent account is $2,750, and rent expense equals $550.