Answer:
a. Rent Expense 2,000
Prepaid Rent 2,000
Explanation:
On December 31, Chan Sports would record the following year-end adjusting entry:
a. Rent Expense 2,000
Prepaid Rent 2,000
Because two months Prepaid rent had expired on 31st December and the Prepaid Rent would decrease by $ 2000. The remaining Prepaid rent would be $ 10,000 and rent expense would be $ 2000. So we credit Prepaid Rent $ 2000 and debit Rent Expense $ 2000.
