Understanding the area-proportionality of black hole entropy (the 'Area Law') from an underlying fundamental theory has been one of the goals of all models of quantum gravity. A key question that one asks is: where are the degrees of freedom giving rise to black hole entropy located? Taking the point of view that entanglement between field degrees of freedom inside and outside the horizon can be a source of this entropy, we show that when the field is in its ground state, the degrees of freedom

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... near the horizon contribute most to the entropy, and the area law is obeyed. However, when it is in an excited state, degrees of freedom far from the horizon contribute more significantly, and deviations from the area law are observed. In other words, we demonstrate that horizon degrees of freedom are responsible for the area law.