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22 August, 05:21

ABC Tax Planning Service started business in January 2018. The company rented an office for $5,400 per month starting from January 1, 2018. On that day, ABC prepaid the rent through June 30. The company makes adjusting entries at the end of each month. What is the balance in the Prepaid Rent account as of April 30, 2018?

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  1. 22 August, 08:51
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    balance in the Prepaid Rent account as of April 30 is $10800

    Explanation:

    given data

    rent office = $5,400 per month

    rent paid = 6 month i. e January 1 to June 30

    to find out

    balance in the Prepaid Rent account as of April 30

    solution

    we know here that Period Expired till April 30 = 4 months (January 1 to April 30)

    and

    so Period Balance = 2 Months (May 1 to June 30)

    so Prepaid Rent is = Balance Period * Rent per month

    Prepaid Rent = 2 * 5,400

    Prepaid Rent = $10800

    so balance in the Prepaid Rent account as of April 30 is $10800
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