X Company prepares monthly financial statements. The following transactions occu

Question

X Company prepares monthly financial statements. The following transactions occurred during January: 1. On January 1, a one-year store rental lease was signed for a total of $31,200, and rent for the first 3 months was paid in advance. 2. On January 1, equipment was purchased for $50,000 with a downpayment of $5,000 and a note for the remainder. The note along with annual interest of 8% was due in a year. The estimated life of the equipment is 10 years with a salvage value of $4,000. 3. Daily wages are $1,700 and are paid every Friday. The last day in January was a Monday. 8. The required adjusting entries on January 31 decreased net income by a total of Submit Answer Tries 0/3 9. The required adjusting entries on January 31 decreased total assets by a total of Submit Answer Tries 0/3

Explanation / Answer

8 Rent 2600 =31200/12 Depreciation expense 383 =(50000-4000)/10/12 Interest expense 300 =45000*8%/12 Wages expense 5100 =1700*3 Decrease in net income 8383 9 Rent 2600 Depreciation expense 383 Decrease in assets 2983

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