On September 1,2011,Joy Company Paid $4,000 in Advance for an 8-Month

question 68

Essay

On September 1,2011,Joy Company paid $4,000 in advance for an 8-month rental space covering the period of September,2011 through April,2012.The business makes adjusting entries once a year at year-end.The adjusting entry at December 31,2011 would include a:
A) debit of $4,000 to Prepaid rent expense on December 31, 2011.
B) debit of $2,000 to Prepaid rent expense on December 31, 2011.
C) debit of $2,000 to Rent expense on December 31, 2011.
D) credit of $2,000 to Rent expense on December 31, 2011.

• A) debit of $4,000 to Prepaid rent expense on December 31, 2011.
• B) debit of $2,000 to Prepaid rent expense on December 31, 2011.
• C) debit of $2,000 to Rent expense on December 31, 2011.
• D) credit of $2,000 to Rent expense on December 31, 2011.

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Definitions:

Constant Growth DDM

The Dividend Discount Model assumes dividends grow at a constant rate indefinitely, used to estimate the value of a company's stock.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Common Stock

Equities, or equity securities, issued as ownership shares in a publicly held corporation. Shareholders have voting rights and may receive dividends based on their proportionate ownership.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.