Llama Company signed a new $36,000 three-year lease beginning October 1, Year 1, for a storage facility for holding merchandise inventory. On October 1, Year 1, Llama Company recorded the first year's payment of $12,000 in the Prepaid Rent account. There was no balance in the Prepaid Rent account prior to this entry. Llama Company records adjustments only at the calendar year end. At December 31,
Year 1, the adjusting entry needed to accurately reflect the correct balances in the Prepaid Rent and Rent Expense accounts would be to debit:
a. Prepaid Rent for $12,000 and credit Rent Expense for $12,000
b. Rent Expense for $12,000 and credit Prepaid Rent for $12,000
c. Prepaid Rent for $3,000 and credit Rent Expense for $3,000
d. Rent Expense for $3,000 and credit Prepaid Rent for $3,000
e. Prepaid Rent for $9,000 and credit Rent Expense for $9,000
D
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Victory Company purchases office equipment at the beginning of the year at a cost of $15,000. The machine is depreciated using the straight-line method. The machine's useful life is estimated to be 7 years with a $1,000 salvage value. The book value at the end of 7 years is:
A. $14,000. B. $1,000. C. $0. D. $2,000. E. $2,143.
Which of the following terms refers to an unconditional and absolute offer by a contracting party to perform his or her obligations under a contract?
A. injunction B. writ of garnishment C. tender of performance D. writ of attachment
Another term for an income statement is
a. profit and loss statement b. income tax statement c. balance sheet d. credit report
An accountant who willfully violates Section 11 of the 1933 Securities Act may be liable for civil but not criminal sanctions
Indicate whether the statement is true or false