X Company prepares monthly financial statements. Its accountant recorded the following October 1 transactions and the appropriate
Question:
X Company prepares monthly financial statements. Its accountant recorded the following October 1 transactions and the appropriate adjusting entries on October 31: On October 1, the company paid rent for the final three months of the year. Rent was $1,500 per month. On October 1, the company purchased equipment that cost $20,000, borrowing the full amount from a bank. The equipment has a life of four years and a salvage value at that time of $2,000. The company will repay the loan on December 31, along with interest at $152 per month.
8. What was the effect of the accountant's entries on total assets?
9. What was the effect of the accountant's entries on Net Income in October?
College Accounting A Contemporary Approach
ISBN: 978-0077639730
3rd edition
Authors: David Haddock, John Price, Michael Farina