On 1 November Pinecrest Physio Inc. pays $2,400 in cash for the clinic’s November rent. Record the payment.

Answer

Dr Rent Expense 2400; Cr Cash 2400

Accounts - Rent Expense - Prepaid Rent - Cash - Accounts Payable - Salaries Expense The rent is for the **current** month, so the benefit is used as it is paid: **Rent Expense** (expense up — debit) and **Cash** (asset down — credit). The trap is **Prepaid Rent**, which is right only when the payment covers future months. Accounts Payable is wrong because cash was paid, not a bill received; Salaries Expense is a different cost.

Hermanson Vol 1 ch 2 (the journal entry’s form; transaction analysis); Dauderis & Annand §2.2, §2.4 (concept map C5, C6)