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On June 1, 2016, Penelope Bermudez established her

On June 1, 2016, Penelope Bermudez established her own advertising firm. Selected transactions for the first few days of June follow.DATETRANSACTIONS2016June 1Signed a lease for an office and issued Check 101 for $18,000 to pay the rent in advance for six months.1Borrowed money from National Trust Bank by issuing a three-month, 10 percent note for $18,000; received $17,550 because the bank deducted interest in advance.1Signed an agreement with Glass Decorations Inc. to provide advertising consulting for one year at $4,550 per month; received the entire fee of $54,600 in advance.1Purchased office equipment for $15,400 from The Equipment Depot; issued a three-month, 12 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,000 salvage value and will be depreciated using the straight-line method.1Purchased a one-year insurance policy and issued Check 102 for $1,944 to pay the entire premium.3Purchased office furniture for $17,400 from Office Gallery; issued Check 103 for $8,400 and agreed to pay the balance in 60 days. The furniture is estimated to have a useful life of five years and a $1,200 salvage value and will be depreciated using the straight-line method.5Purchased office supplies for $2,810 with Check 104; assume $1,150 of supplies are on hand June 30, 2016.INSTRUCTIONS 1. Record the transactions on page 1 of the general journal. Omit descriptions. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability.2. Record the adjusting journal entries that must be made on June 30, 2016, on page 2 of the general journal. Omit descriptions.Analyze: At the end of the year, 2016, how much of the rent paid on June 1 will have been charged to expense?View Solution: On June 1 2016 Penelope Bermudez established her own advertising

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