Exercise $13-15$A $($Algo$)$ Recording prepaid items and identifying their effect on financial statements LO $13-2$

Cherokee Company began operations when it issued common stock for $$98,000$ cash. It paid $$88,200$ cash in advance for a one$-$year contract to lease delivery equipment for the business. It signed the lease agreement on March $1,$ Year $1,$ which was effective immediately. Cherokee received $$112,700$ of cash revenue in Year $1.$

Required

a$.$ & b$.$ Record the March $1$ cash payment and adjustment required as of December $31,$ Year $1$ in general journal format.

c$.$ Show all events in a horizontal statements model.

d$.$ & e$.$ What amount of net income will Cherokee Company report on the Year $1$ income statement? What is the amount of net cash flow from operating activities for Year $1?$ Determine the amount of prepaid rent Cherokee Company would report on the December $31,$ Year $1,$ balance sheet.

Complete this question by entering your answers in the tabs below.

Req A and $B$

Req C

Req $D$ and $E$

What amount of net income will Cherokee Company report on the Year $1$ income statement? What is the amount of net cash flow from operating activities for Year $1?$ Determine the amount of prepaid rent Cherokee Company would report on the December $31,$ Year $1,$ balance sheet.

Note: Do not round intermediate calculations.

d$.$ Net income

Net cash flow from operating activities

e$.$ Prepaid rent