Calco Inc. rents its store location. Rent is $9,000 per month, payable quarterly in advance. On July 1, a check for $27,000 was issued to the landlord for the JulySeptember quarter. Required:

1. Prepare the Horizontal model and Journal entry for each of the following transactions.
   1. To record the payment on July 1, assuming that all $27,000 is initially recorded as Rent Expense.
   2. To record the adjustment that would be appropriate at July 31 if your entry in a had been made.
   3. To record the payment on July 1, assuming instead that all $27,000 is initially recorded as Prepaid Rent.
   4. To record the adjustment that would be appropriate at July 31 if your entry in c had been made.
   5. To record the adjustment that would be appropriate at August 31 and September 30, regardless of how the payment on July 1 had been initially recorded (and assuming that the July 31 adjustment had been made).

Indicate the financial statement effect.

2. If you were supervising the bookkeeper, how would you suggest that the July 1 payment be recorded?