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Problem 1: On January 1, Year 4, Eugene Company had a proper balance in Prepaid Rent of $1,700. The firm only has one rented property and the lease on that property expired on March 31, Year 4. The firm had paid $13,600 on March 31, Year 2, for the two-year lease starting on that date. On March 31, year 4, the firm paid $15,600 for a new two year lease starting on the same date. The firm has unadjusted balances in its Rent Expenses account and Prepaid Rent accounts on December 31, year 4, of $15,600 and $1,700, respectively.
Required: Show the proper adjusting journal entry at December 31, Year 4, the end of Eugene's fiscal year.
Present entries to record the following selected transactions completed during the current fiscal year:
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