M4-6 Recording Adjusting Journal Entries [LO 4-2] For each of the following tran

Question

M4-6 Recording Adjusting Journal Entries [LO 4-2] For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. Collected $5,100 rent for the period October 1 to December 31, which was credited to Unearned Revenue on October 1 amount. $5,880 b. Paid $3,360 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that c. Used a machine purchased on October 1 for $58,800. The company estimates annual depreciation of View transaction list View journal entry worksheet No Transaction General Journal Debit Credit Unearned Revenue Rent Revenue b. Insurance Expense Prepaid Insurance Depreciation Expense Accumulated Depreciation-Equipment

Explanation / Answer

No

Transaction

Accounts Tittles and Explanations

Debit ($)

Credit ($)

1

a

Unearned Revenue A/c

1,700

To Rent Revenue A/c

1,700

[ $5,100 x 1/3 = $1,700]

2

b

Insurance Expenses A/c

140

To Prepaid Insurance A/c

140

[ $3,360 x 1/24= $140]

3

c

Depreciation Expenses A/c

490

To Accumulated Depreciation –Equipment A/c

490

[ $5,880 / 12 Month = $490]

No

Transaction

Accounts Tittles and Explanations

Debit ($)

Credit ($)

1

a

Unearned Revenue A/c

1,700

To Rent Revenue A/c

1,700

[ $5,100 x 1/3 = $1,700]

2

b

Insurance Expenses A/c

140

To Prepaid Insurance A/c

140

[ $3,360 x 1/24= $140]

3

c

Depreciation Expenses A/c

490

To Accumulated Depreciation –Equipment A/c

490

[ $5,880 / 12 Month = $490]

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