Answer:
The January 31 adjusting entry for rent expense:
Debit Rent expense $1,540
Credit Prepaid rent $1,540
Explanation:
On January 2, Dog Mart prepaid $18,480 rent for the year. Dog Mart recorded the entry:
Debit Prepaid rent $18,480
Credit Cash $18,480
Rent expense per month of the year:
$18,480/12 = $1,540
On January 31, the last day of the following 1 month, the company records an adjusting entry:
Debit Rent expense $1,540
Credit Prepaid rent $1,540
