Exercise 3-15A (Algo) Recording prepaid items and identifying their effect on financial statements LO 3- 2 Cherokee Company began operations when it issued common stock for $112,000 cash. It paid $100,800 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 $128,800 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 C Req D and E Record the March 1 cash payment and adjustment required as of December 31, Year 1 in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Journal entry worksheet < 1 2 Record rent paid in advance. Note: Enter debits before credits. Date March 01 General Journal Debit Credit Record entry Clear entry View general journal > View transaction list Journal entry worksheet < 2 Record the adjusting entry for prepaid rent. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Show all events in a horizontal statements model. (Record the events as they occurred in question data. Enter any decreases to account balances an Statement of Cash Flows column, use OA to designate operating activity, LA for investing activity, FA for financing activity, and NC for net change in c intermediate calculations.) Event 1. 2 Cash 3. adj Bal CHEROKEE COMPANY Horizontal Statements Model for Year 11 Balance Sheet Income Statement Assets Liabilities Stockholders' Equity Statement of Cash Flows Prepaid Rent Common Retained Revenue Stock Earnings Expenses Net Income + Complete this question by entering your answers in the tabs below. Req A and B Req C Req D and 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. (Do not round intermediate calculations.) d. Net income Net cash flow from operating activities e. Prepaid rent