Prepare the journal entries to record the below transaction: Paid $3,000 toward lease agreement for bakery space.

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Question:

Prepare the journal entries to record the below transaction:

Paid $3,000 toward lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, last month's rent was required at the time of the lease agreement. The lease period is effective July 1st, 2014 through June 30th, 2015.

Sometimes the company pays for the goods and services in advance and records the amount on the balance sheet as a current asset. The expired expense is then transferred to the income statement.