a. On January 1, 20X1, Frances Corporation started doing business and the owners contributed $200,000 capital in cash.

b. The company paid $24,000 to cover the rent for the office space for the 24-month period from January 1, 20X1, to December 31, 20X2.

c. On March 1, 20X1, MSK Inc. entered into a consulting contract under which Frances Corporation promised to provide consulting to MSK Inc. In return, MSK promised to pay a fee of $150,000, which was to be paid in January 20X2. Frances fulfilled its contractual obligation during 20X1.

d. On July 1, 20X1, Frances purchased office equipment for $100,000 cash. The equipment has an estimated useful life of five years and no salvage value. The equipment was immediately placed into use. Frances uses the straight-line method of depreciation. It records depreciation expense in proportion to the number of months’ usage.

e. Through November 30, 20X1, the company had paid $66,000 to its employees for 11 months of salaries. Accrued salaries on December 31, 20X1, were $6,000.

f. On December 31, 20X1, Norbert Corporation advanced $20,000 to Frances Corporation for consulting services to be provided during 20X2.

Required:

1. Provide journal entries for each of these transactions.

2. Provide adjusting entries at the end of the year.

3. Prepare an income statement for the year ended December 31, 20X1. Ignore income taxes.

4. Prepare a balance sheet as of December 31, 20X1.