On July 1, 2021, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2021 through December 2022. What adjusting entry should Charlie Co. record on December 31, 2021?
A) Debit Rent Expense and credit Cash for $18,000.
B) Debit Rent Expense and credit Prepaid Rent for $18,000.
C) Debit Prepaid Rent and credit Rent Expense for $6,000.
D) Debit Rent Expense and credit Prepaid Rent for $6,000.
Answer: D
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