When rent of the next six months is paid in the current month only, account is debited.

Rent

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Prepaid rent

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Outstanding rent

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Cash

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Solution

The correct option is B Prepaid rent
When rent of the next six months is paid in the current month, it is considered as an asset as the benefit from the same is yet to be received in future. Hence, prepaid rent which is an asset account is debited.

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When rent of the next six months is paid in the current month only, account is debited.

The correct option is B Prepaid rentWhen rent of the next six months is paid in the current month, it is considered as an asset as the benefit from the same is yet to be received in future. Hence, prepaid rent which is an asset account is debited.

The correct option is B Prepaid rent
When rent of the next six months is paid in the current month, it is considered as an asset as the benefit from the same is yet to be received in future. Hence, prepaid rent which is an asset account is debited.