what is the right future effect of this question transaction ? Consider the...
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what is the right future effect of this question transaction ?
Consider the following independent transactions: 1. On June 30 , paid in advance, $7,700 for first and last month's rent. 2. On July 1, paid in advance, $2,640 for 6 months insurance. 3. Issued $5.200 in common shares for legal services. 4. Bought a used delivery van for $22,300 and paid for it with $10,000 cash and with a $12,300 loan from the bank at 5%. The company expects to use the truck for 5 years. At the end of 5 years the company expects that the vehicle will be worthless. 5. Sold goods worth $31,800,80% of the sales were on credit and the remainder was in cash. The goods had an inventory cost $16,800 6. Bought $7,600 of inventory on account. For each transaction indicate: Which accounts, if any, will be affected in the future as a result of the transaction. Transaction 1. 2. 3. 4. Future Effect Decrease in Prepaid Rent No Effect Decrease in Prepaid Insurance No Effect No Effect Increase in Depreciation Expense No Effect Increase in Interest Expense
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