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You are using the Payable's Deferred Expense feature (also known as Multiperiod Accounting). You have entered an invoice for a three-month lease that is entered on Jan 10th. The total expense is $12,000 and it covers the rental period from Jan 1st to Mar 31st.
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B. On Mar 31st, Debit Rental Expense for 4,000 and Credit Prepaid Expense for 4,000On Jan 10th, Debit Prepaid Expense for 12,000 and Credit Liability for 12,000
C. On Jan 10th, Debit Prepaid Expense 12,000 and Credit Liability for 12,000
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4,000 and Credit Prepaid Expense for 4,000On Mar 31st, Debit Rental Expense for 4,000 and Credit Prepaid Expense for 4,000
Answer: D
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