2. At the beginning of the 20X1 fiscal year, Hawkeye Inc. had pre-paid rent of $24,000. Hawkeye made no rental payments during the year and ended the year with no pre-paid rent and a credit balance of $12,000 for rent payable (rent payable at the beginning of the year was zero).

NOTE: Question 2 contains parts a and b below.

a. Provide one journal entry to record Hawkeyes rent expense for the year. (3 points)

b. What effect would Hawkeyes rent costs/expense have on their working capital (increase, decrease, or no effectif increase or decrease, provide the amount)? (3 points)