So I thought I understood prepaid rent; however, one of my questions is continua

Question

So I thought I understood prepaid rent; however, one of my questions is continually showing to be wrong. Here it is: "Journal entries for prepaid rent. ABB Group (ABB), headquartered in Switzerland, is one of the world's largest engineering companies. ABB applies U.S. GAAP, and reports its results in millions of U.S. dollars. Based on ABB's financial reports for fiscal 2007, at January 1, 2007, ABB reported a balance in its Prepaid Rent account of $247 million; assume that this amount reflects its prepayments of rent on factory and office space for the next month. Assume also that on January 31, 2007, ABB paid $3,200 million as the annual rent for the period from February 1, 2007, to January 31, 2008. ABB has a calendar year reporting period." The journal entries I can't seem to get right are these: December 31 Rent Expense:_______ Prepaid Rent:_______ (To record the adjusting entry for the consumption of the prepaid portion of rent expense for the months of February through December. ) I would think I would need to adjust it by $2933 million in both categories, as 11 months are included in that period. What am I doing wrong? I also tried $3180 as was suggested on another question; that, too, was incorrect.

Explanation / Answer

I think you have put figures incorrectly one is 2933.33 & other is 2933.3 Try below entry: Dec 31 Rent Expense Dr $2933.33 Prepaid Rent Cr 2933.33 or Dec 31 Rent Expense Dr $2933 Prepaid Rent Cr 2933

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