Questions 8 and 9 refer to the following information X Company prepares monthly

Question

Questions 8 and 9 refer to the following information X Company prepares monthly financial 1. On January 1, 2. On January 1, equipment was purchased for s statements. The following transactions occurred during January Print Info a one-year store rental lease was signed for a total of $38,400, and rent for the first 2 months was paid in advance. The estimated life of the equipment is 10 years with a salvage value of $4,000 3. Daily wages are $1,600 and are paid every Friday. The last day in January was a Monday $55,000 with a downpayment of $11,000 and a note for the remainder. The note along with annual interest of 7% was due in a year. 8The required adjusting entries on January 31 decreased net income by a total of Submit Answer Tries 1/3 Previous Tries 9. The required adjusting entries on January 31 decreased total assets by a total of Submit Answer

Explanation / Answer

Entries required Date Account titles Debit Credit Jan. 31 1 Rent expense 3200 Prepaid rent (38400/12) 3200 (Rent for jan month recorded) 2 Depreciation expense 425 Accumulated depreciation 425 [(55000-4000)/10]*1/12 (Depreciation recorded) Interest expense 257 Interest payable (44000*7%*1/12) 257 (Interest on note due) 3 Wages expense 1600 Wages payable 1600 (Wages due) 8 Decrease in net income means increase in expense Decrease in net income=3200+425+257+1600=$ 5482 9 Decreased total asset=3200+425=3625

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