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Green Grass Company has $8,300 in prepaid rent at the beginning of April. April's rent is...

Green Grass Company has $8,300 in prepaid rent at the beginning of April. April's rent is $3,600. Which of the following best describes the effect of the adjustment required at the end of April?

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Answer #1
Prepaid rent at the beginning means rent paid in advance for the upcoming months.
In April, rent is $3,600.So, rent expense will be increased and prepaid expense will be decreased.
So, the adjustment at the end of April will be as follows:
Debit Credit
Rent Expense $       3,600
Prepaid Rent $       3,600
After such adjustments, balance in prepaid rent = $       8,300 - $       3,600
= $       4,700
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