John Company pays four months' rent at $800 per month on December 1 for December, January, February and March. John records this with a debit to prepaid rent and a credit to cash for $3,200. When preparing to produce financial statements for the year ended 12/31, John's accountant erroneously believed the entire $3,200 was originally recorded as a debit to rent expense and made the adjustment based on that assumption. Which of the following is true? Rent expense is understated $3,200 Prepaid rent is understated $3,200 Rent expense should be $2,400 for December Prepaid rent should be $800 on December 31 None of the above are true A company recorded the $19,000 adjusting entry for accrued interest revenues on monies it loaned by debiting liabilities and crediting assets $19,000. Total owners' equity is $19,000 understated $19,000 overstated $38,000 overstated | o o $38,000 understated Correctly stated Question 22 1 pts A company recorded the $25,000 adjusting entry for the earning of rent received in advance by debiting revenues and crediting assets $25,000. Net income is $25,000 understated $25,000 overstated $50,000 overstated $50,000 understated correctly stated A company recorded the $31,000 adjusting entry for the expiration of prepaid rent by debiting revenues and crediting liabilities $31,000. Total owners' equity is $31,000 understated $31,000 overstated $62,000 overstated $62,000 understated correctly stated Question 24 1 pts A company recorded the $37,000 adjusting entry for the accrual of salaries payable by debiting assets and crediting revenues $37,000. Net income is $37,000 understated $37,000 overstated $74,000 overstated $74,000 understated correctly stated