(Effect of Transactions on Financial Statements) Indicate how the following transactions will be accounted for in the statement of comprehensive income and the statement of financial position for a company with a fiscal year end of December 31, 2012:
- The company receives an invoice on October 1, 2012, for rent for the period November 1, 2012, to April 30, 2013, and pays the invoice on October 20, 2012.
- The company buys a machine on June 1 for $28,000. The machine is expected to be used for six years and has an estimated residual value of $4,000.
- The company”s accounts receivable balance is $150,000. It has not created a provision for bad debt in the past as customers have always paid their outstanding accounts. On December 20, 2012, the company learns that one of its customers who owes the company $22,000, has filed for bankruptcy and they will probably not receive any of the money owed.