Exercise $13-15$A $($Algo$)$ Recording prepaid items and identifying their effect on financial statements LO $13-2$

Cherokee Company began operations when it issued common stock for $$98,000$ cash. It paid $$88,200$ 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. Cherokee received $$112,700$ of cash revenue in Year $1.$

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 Cherokee Company report on the Year $1$ income statement? What is the amount of net cash flow from operating activities for Year $1?$ Determine the amount of prepaid rent Cherokee Company would report on the December $31,$ Year $1,$ balance sheet.

Complete this question by entering your answers in the tabs below.

Req A and $B$

Req $D$ and $E$

Show all events in a horizontal statements model.

Note: Record the events as they occurred in question data. Enter any decreases to account balances and cash outflows with a minus sign. In the Statement of Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Not all cells require input. Do not round intermediate calculations.

$\backslash$table$[[$CHEROKEE COMPANY$],[$Horizontal Statements Model for Year $1],[$Event$,$Balance Sheet,Income Statement,$\{$

$\backslash$table$[[$Statement of Cash$],[$Flows$]]\}],[$Assets$,=,$Liabilities,$+,$Stockholders' Equity$],[$Cash$,+,\backslash$table$[[$Propaid$],[$Rent$]],\backslash$table$[[$Common$],[$Stock$]],+,\backslash$table$[[$Retained$],[$Earnings$]],$Revenue,Expenses,$=,$Net Income$],[1.,,+,,=,,+,,+,,,-,=,,,],[2.,,+,,=,,1+,,+,,,-,=,,,],[3.,,+,,=,,+,,+,,,-1,=,,,],[$adjustment$,,+,,=,,+,,+,,,-,=,,,],[$Balance$,,+,,=,,+,,+,0,0,0,=,0,07,]]$