Question

Journalize the adjusting entry needed at December 31, the fiscal year-end, for each of the following independent situations. No other adjusting entries have been made for the year. (Record debits first, then credits. Exclude explanations from any journal entries.)

 On October 1, $4,500 rent was collected in advance. Cash was debited and Unearned rent revenue was credited. The tenant was paying six months' rent in advance.

 The business holds a $25,000 note receivable. Interest revenue of $875 has been earned on the note but not yet received.

 Salaries expense is $1,100 per day, Monday hrough Friday, and the business pays employees each Friday.

 This year, December 31 falls on a Thursday.

 The unadjusted balance of the Supplies account is $2,200. Supplies on hand total $600.

 Equipment was purchased two years ago at a cost of $28,000. The equipment's useful life is seven years.

 a. On October 1, $4,500 rent was collected in advance. Cash was debited and Unearned rent revenue was credited. The tenant was paying six months' rent in advance.

Answer 1

Answer-

Solution:

Adjustment Entries on Oct 31

Transaction #	Date	Account Titles	Debit	Credit
a)	Oct.31	Unearned Rent Revenue	$2,250
		Rent Revenue (4,500/6month * 3 months revenue)		$2,250
b)	Oct.31	Interest Receivable	$875
		Interest Revenue		$875
c)	Oct.31	Salaries Expense (for 3 days Monday to Wed Payable $1,100*3)	$3,300
		Salaries Payable		$3,300
		(Salaries payable for only 3 days (Mon to Wed) since last week salaries are paid on Friday)
d)	Oct.31	Supplies Expense (2,200 - 600)	$1,600
		Supplies Account		$1,600
		(Supplies Expense recorded)
e)	Oct.31	Depreciation Expense (28,000 / 7)	$4,000
		Accumulated Depreciation		$4,000