On April 1, Year 1, Maine Corporation paid $9,400 cash in advance for a one-year lease on an office building. Assume that Maine records the prepaid rent as an asset and that the books are closed on December 31. Required a. Show the payment for the one-year lease and the related adjusting entry to recognize rent expense in the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) Event Paid rent in advance Adjusting rent expense Totals Event/ Adjustment 8. a Ad b Adj C Adj d Adj e a. Cash Decrease Event/ Adjustment MAINE CORPORATION Accounting Equation for Year 1 Assets Liabilities 0 Net Income Direction of Amount of Change Change Adj. b. Adj. C. Adj. d. Adj. e. Adj. f. Adj. 9. Adj. h. Adj. i. Adj. Prepaid Rent - a. Paid $2,800 cash on October 1 to purchase a one-year insurance policy. b. Purchased $1,450 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $400. c. Provided services for $7,800 cash d. Collected $9,300 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $3,100. f. Sold land that cost $17,800 for $17,800 cash. g. Acquired $55.000 cash from the issue of common stock. h. Earned $11,900 of revenue on account. Collected $10,710 cash from accounts receivable. 1. Paid cash operating expenses of $1,750. WO 700 0 -> Decrease Cash Flows from Operating Activities Direction of Amount of Change Change 2.800 Decrease + 0. S Net Income Direction of Amount of Change Change Stockholders' Equity Retained Earnings Common Stock + 700 0. -0 Cash Flows from Operating Activities Direction of Amount of Change Change $ 2,800 Decrease

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On April 1, Year 1, Maine Corporation paid $9,400 cash in advance for a one-year lease on an office building. Assume that Maine
records the prepaid rent as an asset and that the books are closed on December 31.
Required
a. Show the payment for the one-year lease and the related adjusting entry to recognize rent expense in the accounting equation. (Do
not round intermediate calculations. Enter any decreases to account balances with a minus sign.)
Event
Paid rent in advance
Adjusting rent expense
Totals
ces
a
Adj
b.
e. Accrued salaries amounting to $3,100.
f. Sold land that cost $17,800 for $17,800 cash.
Adj.
C
Adj.
d.
Adj
Net Income
Event/
Adjustment Direction of Amount of
Change
Change
e
Cash
MAINE CORPORATION
Accounting Equation for Year 1
Assets
Liabilities
Decrease
Event/
Adjustment
a.
0
Adj.
b.
Adj.
C.
Adj.
d.
Adj.
e.
Adj.
f.
Adj.
9.
Adj.
h.
Prepaid Rent-
Adj.
i.
Adj.
a. Paid $2,800 cash on October 1 to purchase a one-year insurance policy.
b. Purchased $1,450 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after
adjustment, was $400.
NO
c. Provided services for $7,800 cash.
d. Collected $9,300 in advance for services to be performed in the future. The contract called for services to start on May 1 and to
continue for one year.
700
0-
g. Acquired $55,000 cash from the issue of common stock.
h. Earned $11,900 of revenue on account. Collected $10,710 cash from accounts receivable.
1. Paid cash operating expenses of $1,750.
Decrease
Cash Flows from
Operating Activities
Direction of Amount of
Change
Change
2.800
Decrease
+
+
S
•
0.
Net Income
Direction of Amount of
Change
Change
Stockholders' Equity
Common
Stock
+
700
.
0.
Retained
Earnings
Cash Flows from
Operating Activities
Direction of Amount of
Change
Change
Decrease
$
2,800
Transcribed Image Text:On April 1, Year 1, Maine Corporation paid $9,400 cash in advance for a one-year lease on an office building. Assume that Maine records the prepaid rent as an asset and that the books are closed on December 31. Required a. Show the payment for the one-year lease and the related adjusting entry to recognize rent expense in the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) Event Paid rent in advance Adjusting rent expense Totals ces a Adj b. e. Accrued salaries amounting to $3,100. f. Sold land that cost $17,800 for $17,800 cash. Adj. C Adj. d. Adj Net Income Event/ Adjustment Direction of Amount of Change Change e Cash MAINE CORPORATION Accounting Equation for Year 1 Assets Liabilities Decrease Event/ Adjustment a. 0 Adj. b. Adj. C. Adj. d. Adj. e. Adj. f. Adj. 9. Adj. h. Prepaid Rent- Adj. i. Adj. a. Paid $2,800 cash on October 1 to purchase a one-year insurance policy. b. Purchased $1,450 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $400. NO c. Provided services for $7,800 cash. d. Collected $9,300 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. 700 0- g. Acquired $55,000 cash from the issue of common stock. h. Earned $11,900 of revenue on account. Collected $10,710 cash from accounts receivable. 1. Paid cash operating expenses of $1,750. Decrease Cash Flows from Operating Activities Direction of Amount of Change Change 2.800 Decrease + + S • 0. Net Income Direction of Amount of Change Change Stockholders' Equity Common Stock + 700 . 0. Retained Earnings Cash Flows from Operating Activities Direction of Amount of Change Change Decrease $ 2,800
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