90.2K

Verified Solution

Link Copied!

Question 1 (2 points) 1. Long Trail City uses the calendar year. It also uses the consumption method when recording prepayments. The city maintains its books and records in a manner that facilitates the preparation of fund financial statements. On June 1, 2019 the city paid $240,000 to lease a warehouse for one year. The rental agreement allows the city to use the warehouse from June 1, 2019 to May 31, 2020. What is the journal entry to recognize the rent expenditure during 20192 O a) Debit Rent Expenditure $240,000; Credit Cash $240,000 Ob) Debit Rent Expenditure $140,000; Credit Prepaid Rent $140,000 Oc) Debit Rent Expenditure $240,000; Credit Prepaid Rent $240,000 d) Debit Rent Expenditure 120,000; Credit Prepaid Rent $120,000 Oe) Debit Rent Expenditure $100,000; Credit Prepaid Rent $100,000 Question 2 (2 points) 2. Using the facts in the previous question (QI), what is the year-end adjusting journal entry required for 2019 O a) Debit Prepaid Rent $120,000; Credit Reserved Fund Balance Prepaid Asset $120,000 Ob) Debit Fund Balance Unreserved $100,000; Credit Reserved Fund Balance-Prepaid Asset $100,000 O Debit Fund Balance --Unreserved $240,000 Credit Reserved Fund Balance - Prepaid Asset 240,000 d) Debit Reserved Fund Balance - Prepaid Asset 140,000: Credit Fund Balance Unreserved 5140,000 e) Debit Fund Balance Unreserved $120.000 Credit Reserved Fund Balance-Prepaid Asse 5120.000 Question 3 (2 points) saved Book Air

Answer & Explanation Solved by verified expert

See Answer