What was the combined effect of the octobe

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Question - X Company prepares monthly financial statements. The following transactions occurred on October 1:

-paid the premium for the first year of a $5,000, five-year insurance policy,

-paid cash for equipment that cost $20,000; the equipment has a life of four years and salvage value at that time of $2,000, and

-borrowed $23,000 from a bank, to be repaid on December 31 along with interest of $96 per month.

The accountant made entries to record the transactions on October 1 and the adjustments on October 31.

Required - What was the combined effect of the October 1 and October 31 entries on October Net Income?

Reference no: EM133179964

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