Exercise 3-4A (Algo) Prepaid items on financial statements LO 3-2 Life, Incorporated experienced the following events in Year 1, its first year of operation: 1. Performed counseling services for $26,000 cash. 2. On February 1, Year 1, paid $18,000 cash to rent office space for the coming year. 3. Adjusted the accounts to reflect the amount of rent used during the year. Required: Based on this information alone: a. Record the events in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. LIFE, INCORPORATED Effect of Events on the Accounting Equation Assets Event Cash Prepaid Rent Stockholders' = Equity Retained Earnings 1. Performed services 2. Prepaid rent = 3. Used rent Totals 0 0 0