Q3-45. On January 1 of the current year, Oliver Company paid $2,100 rent to cover six months (January-June). Oliver recorded this transaction as follows: A1 A B D E F 1 Journal Entry Accounts Credit 2 3 4 5 Date Jan 1 Prepaid Rent Cash Debit 2,100 2,100 Oliver adjusts the accounts at the end of each month. Based on these facts, the adjusting entry at the end of January should include a. a credit to Prepaid Rent for $350. c. a credit to Prepaid Rent for $1,750. b. a debit to Prepaid Rent for $1,750. d. a debit to Prepaid Rent for $350. Q3-46. Assume the same facts as in question 3-45. Oliver's adjusting entry at the end of February should include a debit to Rent Expense in the amount of a. $700. c. $350. b. $0. d. $1,400. Q3-47. What effect does the adjusting entry in question 3-46 have on Oliver's net income for February? a. Net income will decrease by $350. c. Net income will increase by $700. b. Net income will increase by $350. d. Net income will decrease by $700. Q3-48. An adjusting entry recorded June salary expense that will be paid in July. Which state- ment best describes the effect of this adjusting entry on the company's accounting equation? a. Assets are not affected, liabilities are increased, and stockholders' equity is decreased. b. Assets are not affected, liabilities are increased, and stockholders' equity is increased. c. Assets are decreased, liabilities are not affected, and stockholders' equity is decreased. d. Assets are decreased, liabilities are increased, and stockholders' equity is decreased