Qu 1 11 The accounting cycle for Project Paris Limited is from January 1 to December 31, On April 1 Project Paris Limited rented out its old warehouse to Lost and Lost Limited by signing a 12-month agreement worth $4,800,000. The rentee paid the rentor for 12 months agreement in cash. At the start of September, the company signed an agreement to purchase a new warehouse for $20,000,000. The company paid 50% in cash and the remainder by taking out a 5-year loan Annual interest expense on the loan is $3,000,000. Interest will be paid in cash on August 30 each year of the loan period. Annual depreciation on the new warehouse is $2,400,000 At the end of the accounting cycle the CFO of Project Paris Limited estimated that the new warehouse would have increased electricity and water usage from last year by 20%. Utility expenses (that comprised electricity and water) totaled $2,000,000 for the last full year. Required: At the end of the accounting cycle Project Paris Limited would have made adjustment entries to Rental Expense Depreciation Expense, and interest Expense of the following amounts? 16 21 Select one: a. Debit. Rental Expense - $3,600,000; Debit. Depreciation Expense - $2,400,000, Credit. Interest Expense - $1,000,000 b. Debit. Rental Expense - $0; Debit. Depreciation Expense - $800,000; Credit Interest Expense - $1,000,000 c. Debit. Rental Expense - $4,800,000; Debit. Depreciation Expense - $2,400,000; Credit. Interest Expense - $3,000,000 d. Debit. Rental Expense - $3,600,000; Debit. Depreciation Expense - $800,000; Credit Interest Expense - $1,000,000