Washington Mining began operations by issuing common stock for $150,000. The company paid $135,000 cash in advance for a one-year contract to lease machinery for the business. The lease agreement was signed on March 1, 2013 and was effective immediately. Washington Mining received $172,500 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 2013 events in a horizontal statements model like the following one:
.png)
d. What amount of net income would Washington Mining 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 Washington Mining would report on the December 31, 2013, balancesheet.