On July 1, 2018, Fan Inc. leased equipment from Fanatic Co. by signing a 10-month, non-cancelable lease. The lease requires $2,000 payments at the beginning of each month, with the first payment made on the day the lease was signed. This lease is correctly classified as an operating lease for Fan, and Fan elects to apply the exemption for short-term leases (no lease liability or right-of-use asset to record).
What journal entry (if any) is required for this lease on July 1, 2018?

Dr. Prepaid Rent             2,000
Cr. Cash                                                  2,000

Dr. Rent XP                     2,000
Cr. Prepaid Rent                                      2,000

Dr. Rent XP                      2,000
Cr. Cash                                                   2,000

Dr. Cash                           2,000
Cr. Rent Revenue                                     2,000

Answer rating: 100% (QA)

Dr Prepaid Rent 2000 Cr Cash 2000 Dr R... View the full answer