Question

 Consider the following independent situations at December 31:

 Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) 

 a. On October 1, a business collected $6,900 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year's rent in advance. On December 31, the business must account for the amount of rent it has earned.

 b. Salaries expense is $1,400 per day-Monday through Friday-and the business pays employees each Friday. This year December 31 falls on a Thursday.

 c. The unadjusted balance of the Office Supplies account is $3,000. Office supplies on hand total $2,000.

 d. Equipment depreciation was $700.

 e. On April 1, when the business prepaid $3,600 for a two-year insurance policy, the business debited Prepaid Insurance and credited Cash.

Answer 1

Date	Accounts and Explanation	Debit	Credit
(a) Dec 31	Unearned Revenue {$ 6,900 *3/12 months }	$ 1,725
	Service Revenue		$ 1,725
	(To record service revenue that collected in advance)
(b) Dec 31	Salaries Expense {$1,400 * 40 days }	$ 5,600
	Salaries Payable		$ 5,600
	(To record Accrue salaries expenses)
(c) Dec 31	Supplies Expense {$3,000 - $ 2,000 }	$1,000
	Office Supplies		$1,000
	(To record Office supplies used )
(d) Dec 31	Depreciation Expense- Equipment	$ 700
	Accumulated Depreciation-Equipment		$ 700
	(To record depreciation expense on equipment )
(e) Dec 31	Insurance Expense {$ 3,600 *9/ 24 months }	$ 1,350
	Prepaid Insurance		$ 1,350
	( To record insurance expense)