Southern company began operations

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Southern Company began operations when it issued common stock for $100,000 cash. It paid $96,000 cash in advance for a one year contract to lease delivery equipment for the business. It signed the lease agreement on March 1, 2013, which was effective immediately. Southern received $120,000 of cash revenue in 2013.

Required: 

a. Record the March 1 cash payment in general journal format. 

b. Record in general journal format the adjustment required as of December 31, 2013. c. Record all events in a horizontal statements model like the following one:

1456_264-B-A-D-E-F (99).png

d. What amount of net income will Southern Company report on the 2013 income statement? What is the amount of net cash flow from operating activities for 2013? 

e. Determine the amount of prepaid rent Southern Company would report on the December 31, 2013, balance sheet.

Reference no: EM13914880

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