Liquid Crystal Display Corporation (LCD), a Korean multinational firm, reported an ending balance for Prepayments of KRW345,609

Question:

Liquid Crystal Display Corporation (LCD), a Korean multinational firm, reported an ending balance for Prepayments of KRW345,609 million for the year ending December 31, 2012. For the year ended December 31, 2011, the ending balance in this account was KRW260,324. Suppose that at the beginning of 2012, the Prepayments balance consisted of three months of prepaid rent on factory warehouses; at the end of the three months, LCD prepaid one year of rent. LCD follows Korean generally accepted accounting principles and reports its results in millions of Korean won (KRW). For purposes of this problem, assume that LCD uses either U.S. GAAP or IFRS (the choice will not matter).

a. What journal entry did LCD make in each of the three months, January–March of 2012, associated with its prepaid rent?

b. What journal entry did LCD make at the end of March 2012 to reflect its prepayment of one year of rent?

c. What journal entry did LCD make in each of the months April–December of 2012 associated with its prepaid rent?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the... Corporation
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