Answer:
The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is $2,100.
Explanation:
Prepaid Rent is the payment of rent in advance for a specified period of time.
A rent of 4 months has been paid in advance on January 1 at the rate of $700 per month.
January 1
The Journal Entry to recorded prepaid rent was as follow:
Dr. Prepaid Rent $2,800
Cr. Cash $2,800
January 31
The Journal Entry to recorded accrued rent expense for the month January was as follow:
Dr. Prepaid Expense $700
Cr. Prepaid Rent $700
Amount of prepaid rent = $2,800 - $700 = $2,100
