Concept:Prepaid rent is an expense paid in advance and is shown as a current asset on the balance sheet.
Explanation:Rent prepaid on 1/01/2014 was N600.
Rent paid during the year was N3,000.
Rent prepaid on 31/12/2014 is N400.
This means N400 of rent has been paid for the next period and has not yet been used.
Unused prepaid expenses are assets because they provide future benefit.
Since they will be consumed within one year, they are current assets.
Therefore, the balance sheet as at 31st December 2014 will show a current asset of N400.
Answer:B. Current asset of N400