On July 1, Davis Company rented a new office. Before moving in, Davis prepaid for 6 months of rent for $12,000 in total ($2,000 a month).

On July 1, Davis Company rented a new office. Before moving in, Davis prepaid for 6 months of rent for $12,000 in total ($2,000 a month). Prepare the initial entry on July 1 to record the transaction and the adjusting entry at December 31 in the space provided below. Please indicate account name, whether it is debited or credited and amount to get full credit.