Answer:
Dr Cr
Rent Expense $6,000
Prepaid Rent $6,000
Explanation:
Prepaid Expenses are the expenses of a firm which are not incurred but paid in advance. So they are recorded as assets and are expensed out when incurred.
Initial entry recorded by Charlie Co on July 1, 2018 would have been as :
Lets calculate rent expense incurred for 6 months from July 1, 2018 to December 31, 2018
On December 31, 2018 Charlie Co would record adjusting entry for 6 months for rent expense incurred from July 1, 2018 to December 31, 2018 as:
