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on april 1, year 1, maine corporation paid $10,100 cash in advance for a one-year lease on an office building. assume that maine records the prepaid rent as an asset and that the books are closed on december 31.

Respuesta :

The payment for one-year lease and the related adjusting entry in order to recognize rent expense in an accounting equation is shown below.

Maine Corporation

The Accounting equation for the year of 2016 is shown

Event                                 Cash            Prepaid rent    =  Common stock

Retained earnings

Paid rent in advance      ($10,100)            $10,100       =  

Adjusted rent expenses                           ($8,383)       =        ($8,383)

Total                                 ($10,100)                $1,717      =         $8,383

Shown below is the calculation of adjusted rent expense -

The adjusted rent expenses = The prepaid rent × No. of months /Total months in a year.

= $10,100 × 10 / 12

=$8,383

Hence, so the adjusted rent expenses are $8,383.

To learn more about the accounting equation here:

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