Journalize the adjusting entry needed at December 31 forfollowing a. On October
ID: 2351567 • Letter: J
Question
Journalize the adjusting entry needed at December 31 forfollowing a. On October 1, we collected $4000 rent in advance,debiting Cash and Crediting Unearned Rent Revenue. The tenant waspaying one year's rent in advance. At December 31, we must accountfor the amount of rent we've earned.b. Salary expense is $1,500 per day-Monday throught Friday-andthe business pays employees each Friday. This year December 31falls on a Tuesday.
c. The unadjusted balance on the supplies account is $3100.Supplies on hand total $1200.
d. Equipment was purchased last year at a cost of $10,000. Theequipment's useful life is four years. Record the yearsdepreciation
e. On September 1, when we prepaid $1200 for a two yearinsurance policy, we debited Prepaid insurance and CreditedCash.
it should be in the format of a table as to what to debit and what to credit !
Explanation / Answer
a. On October 1, we collected $4,000 rent in advance, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying one year’s rent in advance. At December 31, we must account for the amount of rent we’ve earned. 4,000 x 3/12 = 1,000 Dr Unearned Rent Revenue 1,000 Cr Rent Revenue 1,000 b. Salary expense is $1,500 per day—Monday through Friday—and the business pays employees each Friday. This year December 31 falls on a Tuesday. 1,500 x 2 = 3,000 Dr Wages Expense 3,000 Cr Wages Payable 3,000 c. The unadjusted balance of the Supplies account is $3,100. Supplies on hand total $1,200. 3,100 - 1,200 = 1,900 Dr Supplies Expense 1,900 Cr Supplies 1,900 d. Equipment was purchased last year at a cost of $10,000. The equipment’s useful life is four years. Record the year’s depreciation. 10,000 / 4 = 2,500 Dr Depreciation Expense--Equipment 2,500 Cr Accumulated Depreciation--Equipment 2,500 e. On September 1, when we prepaid $1,200 for a two-year insurance policy, we debited Prepaid Insurance and credited Cash. 1,200 x 4/24 = 200 Dr Insurance Expense 200 Cr Prepaid Insurance 200
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