Answer:
The balance in the prepaid rent account is $10800 at 30 April. So, option C is the correct answer.
Explanation:
The rent is paid at first January for six months is = 5400 * 6 = $32400
On January 1, the company will record a prepaid rent of $32400. The entry will be,
Prepaid rent 32400 Dr
Cash 32400 Cr
The adjusting entries are made at the end of each period. So, out of the total prepaid rent, prepaid rent is credited and is recorded as the rent expense at the end of each month for the amount of $5400.
Rent expense from January to April = 5400 * 4 = $21600
The remaining balance in the prepaid rent account = 32400 - 21600 = 10800
