Question - ABC Company has an Oct 31st fiscal year end. On Oct 31st, 2016. Its prepaid rent account shows balance of $6,600. Beginning July 1, 2017, ABC pay $4,200 or rent of its store. The terms of the lease require that the rent be paid six months in advance in Jan 1 and July 1 each year . Before July 1st, 2017. ABC paid $3,300 a month in rent.
Prepare all journal entries requires in the year ending Oct 31st ,2017 assuming that ABC initially records prepaid cost as expense and use reversing entries.