For each of the transactions in M4-4, indicate the amounts and the direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the following format, indicate + for increase, − for decrease, and NE for no effect.

Data from in M4-4

In each of the following transactions (a) through (c) for Catena’s Marketing Company, use the process illustrated in the chapter to record the adjusting entry at the end of the current year, December 31. The process includes (1) determining if revenue was earned or an expense was incurred and (2) determining whether cash was received or paid in the past or will be received or paid in the future.
a. Collected $1,200 rent for the period December 1 of the current year to April 1 of next year, which was credited to Unearned Rent Revenue on December 1.
b. Purchased a machine for $32,000 cash on January 1. The company estimates annual depreciation at $3,200.
c. Paid $5,000 for a two-year insurance premium on July 1 of the current year; debited Prepaid Insurance for that amount.

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BALANCE SHEET INCOME STATEMENT Transaction Assets Liabilities Stockholders' Equity Revenues Expenses Net Income a.