On January 1, a firm paid $42,000 for six months’ rent, January through June. What is the adjustment for rent expense at the end of January?
a. Rent Expense is debited for $42,000 and Prepaid Rent is credited for $42,000.
b. Prepaid Rent is debited for $7,000 and Rent Expense is credited for $7,000.
c. Rent Expense is debited for $7,000 and Prepaid Rent is credited for $7,000.
d. No adjustment is made until the end of June.