r 4 Homework 066 points M45 Determine Accounting Equation Ef

r 4. Homework 0.66 points M4-5 Determine Accounting Equation Effects of Deferral Adjustments [LO 4-2 give the accounting equation effects of . (Enter any decreases to Assets for the Sky Blue at the end of the month on October 31 Liabilities, or Stockholders\' Equity with a minus sign) b. Paid $984 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that $3,720.

Solution

Effect of transaction :

a) 2130/3 = 710

b) 984/24 = 41

c) 3720/12 = 310

	Assets	=	Liabilities	+	Stockholder\'s equity
a.				Unearned revenue	-710		Rent revenue	710
b.	Prepaid insurance	-41					Insurance expense	-41
c	Accumlated depreciation	-310					Depreciation expense	-310