Check 2 Exercise 3-4A (Algo) Prepaid items on financial statements LO 3-2 Life, Inc. experienced the following events in Your 1, its first year of operation: pos 1. Performed counseling services for $30,800 cash 2. On February 1. Year 1 paid $21,600 cash to rent office space for the coming year 3. Adjusted the accounts to reflect the amount of rent used during the year -Boot Required Based on this information alone a. Record the events in accounts under an accounting equation (Enter any decreases to account balances with a minus sign) LIFE, INC Effect of events on the Accounting Equation Stockholders Assets Equity Event Retained Cash Prepaid Rent Earnings Perfomed service 30.800 30,000 2. Prepaid rem (21.600) 21.000) Used on (19.8001 - (19.000 Totals 9,200 1,800 - 11,000 Boo P b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period (in statement of cash flows, cash outflows should be indicated with a minus sign.) LIFE, BC Income Statement For the Year Ended December 31. Yar Raven S 30.000 Expen The income 5 30.800 2 5 LIE Asaf Der 31, Y Assets Cash 3 1.200 5 9,200 Totud Liabilities Stockholders' Equity 3 Total stockholders Total and sockholders 0 0 3 5 points LIFE, INC Statement of Cash Flows For the Year Ended December 31. Year 1 Cash flows from operating activities co 5 0 Pain Net cash flow from operating activities Cash flows from investing activities Cash flows from financing actio Net change in cash 0 S 0 Ending cash balance c. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? Rent expense to be recognized in Year2