On April 1, Year 2, Maine Corporation paid $18,000 cash in advance for a one-year lease on
Question:
On April 1, Year 2, Maine Corporation paid $18,000 cash in advance for a one-year lease on an office building. Assume that Maine records the prepaid rent as an asset and that the books are closed on December 31.
Required
a. Show the payment for the one-year lease and the related adjusting entry to recognize rent expense in the accounting equation.
b. Assume that Maine Corporation failed to record the adjusting entry to reflect using the office building. How would the error affect the company’s Year 2 income statement and balance sheet?
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Related Book For 
Survey Of Accounting
ISBN: 9781260575293
6th Edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds
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