On September 1, 20X4, Four Brothers Company pays $48,000 cash for six months rent. The balance in prepaid rent on December 31, 20X4, after adjustment, would be:
Question 11 answers
$6,000
$24,000
$12,000
$16,000
2007-06-26 14:48:44 · 4 answers · asked by mke 2 in Business & Finance ➔ Personal Finance
You paid $48k on Sept 1 for 6 mths' rent. That means your rent expense is $8k per mth. By Dec 31, you'd have used up 4 mths of $48k i.e. $32k. That leaves $48k - $32k = $16k as the prepaid portion.
Another way of looking at it is this. On Sept 1 you've paid up to Feb 28. So on Dec 31, there're 2 mths prepaid. So 2 x $8k = $16k.
2007-06-26 16:09:39 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
$16,000
rent is 8000 per month (48000/6)
2007-06-26 22:21:16 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Plz post this question under the accounting forum at http://www.tutorbuddy.org i will answer when you post
2007-06-26 21:52:19 · answer #3 · answered by Anonymous · 0⤊ 1⤋
16,000
2007-06-26 22:02:20 · answer #4 · answered by KillerKat 3 · 0⤊ 0⤋