QUESTION 2 (16 marks; 26 minutes) Preparation of journal entries Part A (5 marks): The following selected events occurred at Rex Corporation during the fiscal year, ending on September 30, 2020. a. Sold merchandise that cost $2,400 for $3,200 cash. b. Declared a cash dividend of $30,000 on September 1, 2020 payable on October 1, 2020. c. Issued 12,000 shares at $13 per share for cash. d Determined that the income tax expense for fiscal year 2020 is $25,000, to be paid on November 1, 2020. No entry has been recorded yet. Required: Prepare all necessary journal entries during fiscal year 2020 only (omit narrative explanations). (5 marks) Part B (11 marks): Zalpha Company, a clothing retailer, reports prepaid expenses and deferred revenues on its statement of financial position. The following information concerns adjusting entries that need to be recorded on December 31, 2019 for the year just ended. Assume no adjusting entries were recorded before December 31, 2019. a. The office supplies account had a balance of $500 at the start of the fiscal year. During the year, the company purchased supplies at a cost of $3,650, which was added to the Office Supplies account. The inventory of supplies on hand (in stock) at December 31 had a cost of $700. b. The company has 10 employees who earn a total of $2,000 per work day (i.e., 10 employees @ $200). They are paid each Monday for their work in the five-day workweek ending on the preceding Friday. December 31, 2019 falls on Tuesday, and all 10 employees worked the first two days of the week. They were paid their salaries for five full days on Monday, January 6, 2020. c. Because the company is not large enough to occupy the entire building, it arranged to rent some space to a tenant at $600 per month, starting on October 1, 2019. The rents for October and November were paid by the tenant on October 1, 2019, but the tenant has not paid the rent for December. However, he promised to pay the rent for both December and January in full on January 31, 2020. d. On October 31, 2019, the company renewed its insurance policy for five months at a cost of $525 per month, effective November 1, 2019. Zalpha paid on October 31 the entire insurance premium for the next five months. Required: 1. Use the information above to prepare adjusting journal entries at December 31, 2019. Omit narratives. (7 marks) 2. Prepare journal entries to record the subsequent cash transactions in January 2020. Omit narrative explanations. (4 marks)