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The advance payment of rent on December 1 covered a period of three months. ...

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Accounting

The advance payment of rent on December 1 covered a period of three months.
The annual interest rate on the note payable to Rent-It is 6 percent.
The rental equipment is being depreciated by the straight-line method over a period of eight years. Any salvage value at the end of its useful life is expected to be negligible and immaterial.
Office supplies on hand at December 31 are estimated at $720.
During December, the company earned $4,440 of the rental fees paid in advance by McNamer Construction Company on December 8.
As of December 31, six days rent on the backhoe rented to Mission Landscaping on December 26 has been earned.
Salaries earned by employees since the last payroll date (December 26) amounted to $1,680 at month-end.
It is estimated that the company is subject to a combined federal and state income tax rate of 40 percent of income before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in Year 2.

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