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llected $1,200 rent for the period December 1 of the current year to April venue on December 1. rchased a machine for $32,000 cash on January 1. The company estimate d $5,000 for a two-year insurance premium on July 1 of the current year; Balance Sheet Income Statement

llected $1,200 rent for the period December 1 of the current year to April venue on December 1. rchased a machine for $32,000 cash on January 1. The company estimate d $5,000 for a two-year insurance premium on July 1 of the current year; Balance Sheet Income Statement

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In each of the following transactions (a) through (c) for Catena's Marketing Company, indicate the effect of the adjusting entry on the elements of the balance sheet and income statement. Note: Reductions in account balances should be indicated with a minus sign. a. Collected $1,200 rent for the period December 1 of the current year to April 1 of next year, which was credited to Unearned Rent Revenue on December 1. b. Purchased a machine for $32,000 cash on January 1. The company estimates annual depreciation at $3,200. c. Paid $5,000 for a two-year insurance premium on July 1 of the current year; debited Prepaid Insurance for that amount. Transaction a b C P Assets Balance Sheet Liabilities Stockholders' Equity Revenues Income Statement Expenses Net Income
Transcribed Image Text:In each of the following transactions (a) through (c) for Catena's Marketing Company, indicate the effect of the adjusting entry on the elements of the balance sheet and income statement. Note: Reductions in account balances should be indicated with a minus sign. a. Collected $1,200 rent for the period December 1 of the current year to April 1 of next year, which was credited to Unearned Rent Revenue on December 1. b. Purchased a machine for $32,000 cash on January 1. The company estimates annual depreciation at $3,200. c. Paid $5,000 for a two-year insurance premium on July 1 of the current year; debited Prepaid Insurance for that amount. Transaction a b C P Assets Balance Sheet Liabilities Stockholders' Equity Revenues Income Statement Expenses Net Income
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