A company pays \$15,000 for a 10-month lease on May 1st. What adjusting entry should be made on October 31st?

• A. Debit Prepaid Rent \$15,000, Credit Rent Expense \$15,000
• B. Debit Rent Expense \$7,500, Credit Prepaid Rent \$7,500
• C. Debit Prepaid Rent \$7,500, Credit Rent Expense \$7,500
• D. Debit Rent Expense \$15,000, Credit Prepaid Rent \$15,000

Answer: (B)