NFP C is an organization that has a September 30 fiscal year-end and follows the accrual basis of accounting.  Its account balances as of September 30, 2021, were as follows:

Cash                                                                                       $120,000

Pledge Receivable (restricted for use in FY 2021-22)      $75,000

Prepaid Insurance (thru December 2021)                          $2,000

Furniture (5-year useful life)                                               $20,000

Accumulated Depreciation – Furniture                            $12,000

Equipment (3-year useful life)                                            $18,000

Accumulated Depreciation – Equipment                           $6,000

Salaries Payable                                                                   $22,000

Accounts Payable                                                                 $17,000

Net Assets without Donor Restrictions                         $103,000

Net Assets with Donor Restrictions                                 $75,000

The following transactions are entered into by NFP C during the first quarter of Fiscal Year 2021-22 (the three months ended December 31, 2021).  For each transaction, you’ve been provided with journal entry information that is either incomplete or that contains one or more errors.  Provide the necessary correction(s) so that the journal entry information properly reflects the transaction.

NFP C has a three-year office lease, for $5,000 a month, that commenced on January 1, 2021.  Payments are made by electronic funds transfer (cash) on the 1^st day of each month for that month’s rent.

Dr.  Rent Expense                           $15,000
       Cr.  Rent Payable                                                $15,000

Answer rating: 100% (QA)

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