Required to prepare the worksheet

It's referring to rent that was paid in advance and has now been "used." Like if you paid your rent three months in advance, at the end of the current month, one month's worth has been used up.

The portion that is used is expensed. The portion that is left and is yet unused should be in the prepaid rent account.

The entry depends on how it was originally recorded. If it's in prepaid rent, you take the expired portion out and put it into the expense. If it was originally recorded in the expense account, then the leftover unexpired portion has to be removed and put into the prepaid account. From the way it's worded, I suspect the former.