Accounting What The Nu. × Accounting What The Nu × Chegg.com × a Chegg.com M Ass
ID: 2421065 • Letter: A
Question
Accounting What The Nu. × Accounting What The Nu × Chegg.com × a Chegg.com M Assignment Results You C fi Dezto.mheducation.com/hm.tpx?todo-postSubmissionV.ew Questions 6- 9 (of 10) Return To Assignment List The following information applies to the questions displayed below.] On November 1, 2013, Wenger Co. pald its landlord $4,500 In cash as an advance rent payment on lts store location. The slx-month lease perlod ends on April 30, 2014, at whlch time the contract may be renewed. b. Award: 1 out of 1.00 point Award: 1 out of 1.00 point Required a.1 Prepare the horizontal model to record the six-month advance rent payment on November 1, 2013. (+ for increase and for decrease). Balance Sheet Income Statement Stockholders Equity Assets Liabilities Net Income Revenues Expenses Cash -4500 Prepaid rent +4500 eBook & Resources lain what prepaid expenses are and how they are the balance sheet 12:45 AM 4).111 2/13/2016Explanation / Answer
Prepaid expenses are future expenses that have been paid in advance.
The amount of prepaid expenses that have not yet expired are reported on a company's balance sheet as an asset. As the amount expires, the asset is reduced and an expense is recorded for the amount of the reduction. Hence, the balance sheet reports the unexpired costs and the income statement reports the expired costs. The amount reported on the income statement should be the amount that pertains to the time interval shown in the statement's heading.
Horizontal model to record the six month advance rent payment on 1st November 2013 Balance sheet Income statement Assets = Liabilities + Stockholders Equity Net Income = Revenues - Expenses Cash -4500 = 0 0 0 0 0 Prepaid rent +4500 = 0 0 0 0 0Prepaid expenses are future expenses that have been paid in advance.
The amount of prepaid expenses that have not yet expired are reported on a company's balance sheet as an asset. As the amount expires, the asset is reduced and an expense is recorded for the amount of the reduction. Hence, the balance sheet reports the unexpired costs and the income statement reports the expired costs. The amount reported on the income statement should be the amount that pertains to the time interval shown in the statement's heading.
Journal entry on 1st November 2013 Date General Journal Debit Credit 1st November 2013 Prepaid rent 4500 To Party 4500 1st November 2013 Party 4500 To Cash 4500Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.