Question

 All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31.

 a. On September 1 of the current year, Zimmerman collected six months' rent of $9,600 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $9,600.

 b. On October 1 of the current year, the company borrowed $18,000 from a local bank and signed a one-year, 12 percent note for that amount. The principal and interest are payable on the maturity date.

 c. Depreciation of $3,500 must be recognized on a service truck purchased in July of the current year at a cost of

 $22,000.

 d. Cash of $3,000 was collected on November of the current year for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.

 e. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $8,400, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount.

 f. The company earned service revenue of $4,000 on a special job that was completed December 29 of the current yeat. Collection will be made during January of the next year. No entry has been recorded.

 g. At December 31 of the current year, wages earned by employees totaled $14,000. The employees will be paid on the next payroll date in January of the next year.

 h. On December 31 of the current year, the company estimated it owed $500 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.

 2. Prepare the adjusting entry required for each transaction at December 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Zimmerman Company on Dec 31st
Trans	Adjusting Entries / General Journal	Debit $	Credit $	workings
a	Unearned Rent Revenue	6400		(9,600/6)*4 =	6400
	Rent Revenue		6400
	Current Revenue recognised
b	Interest expense	540		(18,000*12%)*3/12 =	540
	Notes Payable		540
	Accumulated interest recognised and added to liability
c	Depreciation	3,500
	Provision for Depreciation - Truck A/C		3,500
	Depreciation accounted for. Instead of provision, can be directly credited to assets account
d	Unearned Service Revenue	500		(3,000/12*2)=	500
	ServiceRevenue		500
	Current Revenue recognised
e	Insurance	1,400		(8,400/12*2)=	1400
	Prepaid Insurance		1,400
	Current Expense provided
f	Accounts Receivable	4,000
	Service Revenue		4,000
	Current Revenue recognised
g	Wages expense	14,000
	Wages Payable / Accrued wages		14,000
	Current Expense provided
h	Property Tax expense	500
	Property Tax Payable		500
	Current Expense provided based on estimate.