Question 1

In each of the following transaction (a) through (c) the Catenas Marketing Company indicated the amount and the direction of effects of the adjusting entry on the elements of the balance sheet and income statement indicate + for increase. -for decrease (Reductions in account balance should be indicated with a minus sign)

1. Collected $1,200 rent for the period December 1 of the current year to April 1 of next year, which was credit to Unearned Rent on December 1.
2. Purchased a machine for $32,000 cash on January 1. The company estimates annual depreciation at $3,200.
3. Paid $5,000 for a two-year insurance premium on July 1 of the current-year: debited Prepaid Insurance for that amount.

Balance Sheet Income statement

Transaction Assets Liability Stockholder Revenue Expenses Net Income Equity

a ?X X? X? X? X? X?

b ( 3200) X? (3200) X? (3200) (3200)

c ?X X? X? X? X? X?