Bobby's Bikes is a retail bike shop that sells all types of recreational and high-end bicycles. Their accounting year runs from January 1 to December 31 and they use the accrual basis of accounting.

Q1) Assume that the company receives an order to build 12 racing bikes for the local racing team for $72,000 in December 2015. The customer delivers a $10,000 payment in December to secure the order. Bobby's bikes completes production and delivers all 12 bikes to the racing team in May 2016, at which time the company receives the final payment of $62,000. How much revenue should Bobby's bikes recognize in 2016?

Option A: $0

Option B: $10,000

Option C: $62,000

Option D: $72,000

Q2) Bobby's bikes pays $24,000 for 1 year's rent that begins on September 1. How much rent expense should Bobby's bikes recognise in each of the following months?

September October November A $0 $0 $0 B $24,000 $0 $0 $8,000 $8,000 $8,000 $2,000 D $2,000 $2,000