Life, Inc., experienced the following events in Year 1, its first year of operation:

1. Performed counseling services for $32,400 cash.
2. On February 1, Year 1, paid $22,800 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:

1. Record the events under an accounting equation.
2. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.
3. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2?