Question

For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Collected $2,550 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1. Paid $1,320 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. Used a machine purchased on October 1 for $48,600. The company estimates annual depreciation of $4,860.

Answer 1

Adjusting entry :

Date	account and explanation	debit	credit
Oct 31	Deferred revenue (2550/3)	850
	Rent revenue		850
	(To record rent revenue adjusted)
Oct 31	Insurance expense (1320/24)	55
	Prepaid insurance		55
	(To record insurance expense)
Oct 31	Depreciation expense (4860/12)	405
	Accumlated depreciation-Machine		405
	(To record depreciation expense)