a. On September ?1, when we collected ?$58 comma 000 rent in? advance, we debite

Question

a. On September ?1, when we collected ?$58 comma 000 rent in? advance, we debited Cash and credited 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 have earned. b. Interest revenue of ?$3 comma 000 has been earned but not yet received on a ?$65 comma 000 note receivable held by the business. c. Salary expense is ?$8 comma 100 per daylong dashMonday through Fridaylong dashand the business pays employees each Friday. This year December 31 falls on a Thursday. d. Equipment was purchased last year at a cost of ?$275 comma 000. The? equipment's useful life is five years. It will have no value after five years. Record the? year's amortization. e. On November ?1, when we paid ?$7 comma 800 for a? one-year insurance? policy, we debited Prepaid Insurance and credited Cash. f. The business owes interest expense of ?$8 comma 800 that it will pay early in the next period. g. The unadjusted balance of the Supplies account is ?$13 comma 500. The total cost of supplies remaining on hand on December 31 is ?$4 comma 500.

Explanation / Answer

Journals

a Unearned Rent Revenue Dr 19333.33 (58000*4/12) - for period September to December recognised as income. To Rent Revenue 19333.33 b Unearned Interest Income Dr 3000 To Interest Income 3000 c Salary Expenses Dr 32400 (8100*4) - expense monday through thursday To Salary Payable 32400 d Depreciation on Equipment A/c Dr 55000 (275000/5) - depreciation per year To Equiptment 55000 e Insurance Expense A/c Dr 1300 (7800*2/12) - 2 months insurance cost amortiised. To Pre-paid Insurance 1300 f Interest Expenses A/c Dr 8800 To Interest Payable A/c 8800 g Supplies Consumed A/c 9000 (13500-4500) the difference chaged off to consumption expenses. To Supplies A/c 9000

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