Life, Inc. experienced the following events in Year 1, its first year of operation: 1. Performed counseling services for $36,000 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 (Enter any decreases to account balances with a minus sign.) Stockholders Equity Retained Earnings LIFE, INC. Effect of Events on the Accounting Equation Assets Event Cash Prepaid Rent 1. Performed services 2. Prepaid rent 3. Used rent Totals + + + b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period. (In statement of cash flows, cash outflows should be indicated with a minus sign.) LIFE, INC. Income Statement For the Year Ended December 31, Year 1 LIFE, INC. Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity LIFE, INC. Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance c. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2? Rent expense to be recognized in Year 2