Question

Chapter 3 Hand-out Assignment Question 1 One part of an adjusting entry is given below: 1. Unearned Revenue is debited. 2. Prepaid Rent is credited. 3. Accounts Receivable is debited. 4. Depreciation Expense is debited. 5. Utilities Expense is debited. (give two possible debit accounts). 6. Interest Payable is credited. 7. Service Revenue is credited (give two possible debit accounts). 8. Interest Receivable is debited. Instructions Indicate the account title for the other part of the entry.

Answer 1

			Supporting Explanation
1)	Unearned Revenue is Debited	Service Revenue is Credited	Services revenue is earned for the amount already received, unearned service revenue is debited to give the negative effect and the service revenue is credited.
2)	Prepaid Rent is Credited	Rent Expense is Debited	When rent paid in advance is expired the rent expense is debited to create the expense and the prepaid rent is credited to decrease the balance.
3)	Accounts Receivable is Debited	Service Revenue is Credited	When services are provided on account, accounts receivable account is debited for the amount increased due to receivable and Service revenue is credited for the revenue earned.
4)	Depreciation Expense is Debited	Accumulated Depreciation is Credited	When depreciation is charged, depreciation expense is debited due to increase of expense and accumulated depreciation is credited for the contra account increased.
5)	Utilities Expense is Debited	Utilities is Credited	When utilities (which is a current asset) are used, the utilities account is decreased so it is credited and Utilities Expense account is debited for the increase of expense.
	Income Summary is Debited	Utilities Expense is Credited	When utilities expense is closed to income summary account at the end of the period, the Income Summary account is debited to give the negative impact to the Utilities expense account which gets credited due to close of the account.
6)	Interest Expense is Debited	Interest Payable is Credited	When interest expense is incurred for a particular period of time, interest expense account is debited for the increase of the expense account and interest payable account is credited for the liability payable.
7)	Service Revenue is Credited	Accounts Receivable is Debited	When services are provided on account, accounts receivable account is debited for the amount increased due to receivable and Service revenue is credited for the revenue earned.
	Service Revenue is Credited	Cash is Debited	When services are provided on cash, cash account increases so it is debited and service revenue is credited for the increase of revenue.
8)	Interest Receivable is Debited	Interest Revenue is Credited	When interest revenue is earned, interest revenue account is increased for the revenue so it is credited and amount reecivable in future is called the interest receivable which is an asset and it is debited due to increase.

Answer 2

		Supporting Explanation
1)	Unearned Revenue is Debited	Service Revenue is Credited	Services revenue is earned for the amount already received, unearned service revenue is debited to give the negative effect, and the service revenue is credited.
2)	Prepaid Rent is Credited	Rent Expense is Debited	When rent paid in advance is expired, the rent expense is debited to create the expense, and the prepaid rent is credited to decrease the balance.
3)	Accounts Receivable is Debited	Service Revenue is Credited	When services are provided on account, the accounts receivable account is debited for the amount increased due to receivable, and Service revenue is credited for the revenue earned.
4)	Depreciation Expense is Debited	Accumulated Depreciation is Credited	When depreciation is charged, depreciation expense is debited due to increased expense, and accumulated depreciation is credited for the contra account increased.
5)	Utility Expense is Debited	Utilities are Credited	When utilities (which is a current asset) are used, the utility account is decreased, so it is credited, and the Utilities Expense account is debited for the increase of expense.
	Income Summary is Debited	Utility Expense is Credited	When utility expense is closed to the income summary account at the end of the period, the Income Summary account is debited to negatively impact the utility expense account, which gets credited due to the account's close.
6)	Interest Expense is Debited	Interest Payable is Credited	When interest expense is incurred for a particular period of time, the interest expense account is debited to increase the expense account, and the interest payable account is credited for the liability payable.
7)	Service Revenue is Credited	Accounts Receivable is Debited	When services are provided on account, the accounts receivable account is debited for the amount increased due to receivable, and Service revenue is credited for the revenue earned.
	Service Revenue is Credited	Cash is Debited	When services are provided in cash, the cash account increases, so it is debited, and service revenue is credited for the increase of revenue.
8)	Interest Receivable is Debited	Interest Revenue is Credited	When interest revenue is earned, the interest revenue account is increased for the revenue, so it is credited. The amount receivable in the future is called the interest receivable, which is an asset. It is debited due to an increase.