Answer the following questions about prepaid expenses:
a. On October 1, Up & Down Travel prepaid $3,000 for six months’ rent. Give the adjusting entry to record rent expense at October 31. Include the date of the entry and an explanation. Then post all amounts to the two accounts involved, and show their balances at October 31. Up & Down Travel adjusts the accounts only at October 31, the end of its fiscal year.
b. On October 1, Up & Down Travel paid $950 for supplies. At October 31, Up & Down Travel has $400 of supplies on hand. Make the required journal entry at October 31. Then post all amounts to the accounts and show their balances at October 31.