On July 1, Alpha, Inc. prepaid rent for a small equipment st

On July 1, Alpha, Inc. prepaid rent for a small equipment storage area. Alpha paid $20,000 to rent the area from July 1 through the end of the year. Provide the journal entry needed on July 1 when the payment is made. (Ignore explanation)

Assume the deferred expense is initially recorded as an asset.
What will be an ideal response

ANSWER

Prepaid Rent 20,000
Cash 20,000