Events for Polar Bear Inc:

Polar Bear Inc began operations when it issued common stock for $94,000 cash.

It paid $84,600 cash in advance for a one-year contract to lease delivery equipment for the business. It signed the lease agreement on March 1, Year 1, which was effective immediately.

Polar Bear received $108,100 of cash revenue in Year 1.

Note: Leasing the equipment is similar to Renting the equipment.

Required a. & b. Record the March 1 cash payment and adjustment required as of December 31, Year 1 in general journal format. c. Show all events in a horizontal statements model. d. & e. What amount of net income will Polar Bear report on the Year 1 income statement? Determine the amount of prepaid rent Polar Bear would report on the December 31, Year 1, balance sheet.