Reference no: EM132465794

Question 1: Prepare AJEs that should be made on 12-31-15, the end of the accounting year, for each of the following situations. If no AJE is required, indicate "none." Assume the company only makes AJEs at the end of the accounting year. In addition, identify the impact, if any, on the financial statements if you failedto make the appropriate AJE. Indicate NE for no impact, U for understatement, and O for overstatement. Use the following format to indicate the impact of failing to make the required entry for each situation.

Assets          Liabilities           Expenses             Revenues       Net Income             Owners' Equity

XX                   XX                  XX                       XX                     XX                                 XX

Point a. On July 1, 2015, the company rented a machine for 12 months and paid $24,000 in advance. The journal entry to record the payment included a debit to a permanent account.

Point b. On March 1, 2015, the company collected $1,200 of rent for 12 months in advance. The journal entry to record the receipt included a credit to a temporary account.

Point c. On September 30, 2015, the company collected $10,000 as rent for 2 months in advance. The journal entry to record the receipt included a credit to a permanent account.

Point d. On June 1, 2015, the company rented equipment for 4 months and paid $4,000 in advance. The journal entry to record the payment included a debit to a temporary account.