4-6 (Assume this is the first year of operations for Giant Telecom Co., and assume Giant Telecom pays cash unless noted otherwise, even if it results in Giant Telecom having a credit balance in cash):

1/1 Issued 10,000 shares of common stock with a part value of $1 for $510,000. 2/1 Pay $150,000 for equipment, 10 year useful life, straight line depreciation. Assume full year depreciation in year 1. 3/1 Signs a 5-year headquarters lease, paying full amount of $500,000 upfront. 3/15 Deliver services to client and bill in full for $775,000 (client will pay at a later date). 5/1 Purchase $100,000 worth of supplies on credit. By 12/31 $50,000 of supplies are left 8/1 Receive $2,000,000 in advance payment from a client for services that will be performed by Giant Telecom. in 2024. 10/1 Declare $40,000 in dividends to be paid in 2024. 11/1 Purchase $650,000 in inventory. 12/1 Pay $25,000 of the 5/1 purchase of supplies.

4. What is the 12/31 adjusting entry related to the 3/1 signing of the lease

a. Debit rent expense $500,000; prepaid rent $500,000

b. Debit prepaid rent $500,000; credit cash $500,000

c. Debit rent expense $83,333; credit prepaid rent $83,333

d. Debit cash $83,333; credit accounts payable $83,333

e. None of the above

5. What is the balance of Accumulated Depreciation on 12/31/23 (after completing 2023 adjusting journal entries)?

a. $150,000 credit

b. $150,000 debit

c. $15,000 debit

d. $15,000 credit

e. None of the above

6. What is the journal entry to close out expenses?

a. Debit Income Summary $65,000; credit expenses $65,000

b. Debit Income Summary $148,333; credit expenses $148,333

c. Debit expenses $65,000; credit Income Summary $65,000

d. Debit expenses $148,333; credit Income Summary $148,333

e. None of the above