Question

On

April

​1, a business collected

$3,600

rent in​ advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one​ year's rent in advance. At December​ 31, the business must account for the amount of rent it has earned.

a.On April​ 1, a business collected $3,600 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 $1,000 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 $3,100. Office supplies on hand total $1,700.

d.Equipment depreciation was $700.

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

Date			Accounts and Explanation	Debit	Credit
(a) Dec. 31

b. Salaries expense is

$1,000

per

day—Monday

through

Friday—and

the business pays employees each Friday. This year December 31 falls on a

Thursday.

Date			Accounts and Explanation	Debit	Credit
(b) Dec. 31

c. The unadjusted balance of the Office Supplies account is

$3,100.

Office supplies on hand total

$1,700.

Date			Accounts and Explanation	Debit	Credit
(c) Dec. 31

d. Equipment depreciation was

$700.

Date			Accounts and Explanation	Debit	Credit
(d) Dec. 31

e. On

July

​1, when the business prepaid

$3,600

for a​ two-year insurance​ policy, the business debited Prepaid Insurance and credited Cash.

Date			Accounts and Explanation	Debit	Credit
(e) Dec. 31

Answer 1

Adjusting entries

date	Accounts and explanation	Debit	Credit
Dec 31	Unearned rent	2700
	Rent revenue (3600*9/12)		2700
Dec 31	Salaries expense (1000*4)	4000
	Salaries payable		4000
Dec 31	Office supplies expense (3100-1700)	1400
	Office supplies		1400
Dec 31	Depreciation expense	700
	Accumulated depreciation-equipment		700
Dec 31	Insurance expense (3600/24*6)	900
	Prepaid insurance		900