Marlin Enterprises Signed a Lease for Office Space During Their

question 18

Multiple Choice

Marlin Enterprises signed a lease for office space during their first month of business.At that time they paid a total of $12,000 for first and last months' rent.At the end of the first month,the effect on the financial statements would be

• A)$12,000 rent expense.
• B)$6,000 rent expense and $6,000 prepaid rent on the Statement of Financial Position.
• C)$12,000 prepaid rent on the Statement of Financial Position.
• D)Nothing recorded because the company has not made any sales yet.

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Definitions:

Magma

The molten or semi-molten natural material from which all igneous rocks are formed, found beneath the Earth's surface.

Underground

Beneath the surface of the Earth, including areas such as caves, tunnels, and mined spaces.

Cooling Magma

The process of molten rock solidifying as it cools, forming igneous rock.

Igneous Rock

Igneous rock forms from the cooling and solidification of magma or lava and can be found at or beneath the surface of the Earth.