What effect does the adjusting entry in question 3-46 have on Oliver’s net income for February?
a. Net income will decrease by $350.
b. Net income will increase by $350.
c. Net income will increase by $700.
d. Net income will decrease by $700.

Data from Question 3-46

On January 1 of the current year, Oliver Company paid $2,100 rent to cover six months (January–June). Oliver recorded this transaction as follows:

A1 Journal Entry Debit Credit Date Accounts 2 3 4 Jan 1 Prepaid Rent 2,100 ash 2,100