Problem: Module 1 Textbook Problem 10 Learning Objectives: 1-10 Show how accounting for prepaid items affects financial statements 1-11 Show how accounting for unearned revenues affects financial statements On May 1, Year 2, Stokes Company paid Eastport Rentals $32,000 for a 12-month lease on warehouse space. Required a. Record the deferral and the related December 31, Year 2, adjustment for Stokes Company in the accounting equation. b. Record the deferral and the related December 31, Year 2, adjustment for Eastport Rentals in the accounting equation. Complete this question hy antorinn wur STOKES COMPANY Accounting Equation - Year 2 Assets Liabilities Cash Prepaid Rent + Event Stockholders' Equity Common Retained Stock Earnings + Paid 12 months rent + Adjustment for 8 months used = + with a minus sign.) EASTPORT RENTALS Accounting Equation - Year 2 Assets Liabilities + Cash Unearned + Ravenue Stockholders' Equity Common Retained Stock Earnings Event . 11 Received 12 months rent Eamed 8 months rent + 11