Question

28 Journalizing adjusting entries and analyzing their effect on the income statement The following data at July 31, 2018, are given for RCO: a. Depreciation, $600. b. Prepaid rent expires, $200. c. Interest expense accrued, $700. d. Employee salaries owed for Monday through Thursday of a five-day workweek; weekly payroll, $8,000.

Answer 1

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Naming convention and format are not available, can be slightly different: Solution: Credit Date July.31 2018 Debit 600 $ $ 600 $ 200 July.31 2018 $ 200 $ 700 July.31 2018 $ 700 Journal entries Account title and explaination Depreciation Expense Accumulated Depreciation (To record the depreciation expense) Rent Expense Prepaid Rent (To record the rent expense) Interest Expense Interest payable (To record the accrual of interest expense) Salaries Expense (8000/5)*4 Salaries payable (To record the payroll accrual) Unearned Revenue Revenue (Sales or service or earned) (To record the earned revenue) Office Supplies Expense Office Supplies (To record the office supplies expense) July.31 2018 $ 6,400 $ 6,400 $ 1,000 July.31 2018 $ 1,000 $ 150 July.31 2018 $ 150 Depreciation Overstatement of net income Prepaid rent Overstatement of net income Interest expense Overstatement of net income Salaries Expense Overstatement of net income Unearned revenue Understatement of net income Office supplies expense Overstatement of net income Overstatement of net income $ 600 $ 200 $ 700 $ 6,400 $ -1,000 $ 150 $ 7,050