On March 1 the XYZ Company paid $36,000 for one year's rent in advance (covering March 1 thorugh February 28 of next year) and prepared an appropriate journal entry.

The following information applies to questions 3 through 5: (Note: There are two possible solution sets.) On March 1 the XYZ Company paid $36,000 for one year's rent in advance (covering March 1 through February 28 of next year) and prepared an appropriate journal entry. 3. On March 1 what account should they debit? (2 pt) If no other entries are made to the above account, on December 31 which of the following statements would be true? (2 pt) 4. a. Assets are overstated, and Liabilities are understated. b. Unearned Revenue is overstated, and Revenue is understated. c. Prepaid Expenses are understated, and Cash is overstated. d. Assets are overstated, and Expenses are understated. e. Expenses are overstated, and Assets are understated. 5. Given your answer to the previous questions, if an adjusting entry is needed on Dec 31, journalize it (5 pt)