What is the answer to the following exercise

timer Asked: Nov 8th, 2014

Question description

Exercise 2-9A Prepaid items on financial statements

Therapy Inc. experienced the following events in 2013, its first year of operation:

1.  Performed counseling services for $18,000 cash.

2.  On February 1, 2013, paid $12,000 cash to rent office space for the coming year.

3.  Adjusted the accounts to reflect the amount of rent used during the year.


Based on this information alone

a. Record the events under an accounting equation

b. Prepare an income statement, balance sheet, and statement of cash flows for the 2013 accounting period.

c. Ignoring all other future events, what is the amount of rent expense that would be recognized in 2014?

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