Question

Print 6. The following data at July 31, 2018, are given for RCO: (Click the icon to view the data.) Read the requirements Requirement 1. Joumalize the adjusting entries needed on July 31, 2018. (Record debits first, then credits. Select the explanation on the last line of the joumal entry table.) a. Depreciation. $600. Date Accounts and Explanation Debit Credit (a) Jul 31 (1) (2) b. Prepaid rent expires, $200. (Assume that RCO debits an asset account when rent is paid in advance.) Date Accounts and Explanation Debit Credit (b) Jul. 31 (10) c. Interest expense accrued, $700. Date Accounts and Explanation Debit Credit (c) Jul 31 (12) (13) (14) |(15)

Answer 1

1.

Date	Accounts and Explanation	Debit	Credit
(a) Jul. 31	(1) Depreciation expense	600
	(2) Accumulated depreciation		600
	(3)
	(4)
	(5) To record depreciation.
(b) Jul. 31	(6) Rent expense	200
	(7) Prepaid rent		200
	(8)
	(9)
	(10) To record rent expense.
(c) Jul. 31	(11) Interest expense	700
	(12) Interest payable		700
	(13)
	(14)
	(15) To accrue interest expense.
(d) Jul. 31	(16) Salaries expense ($8000 x 4/5)	6400
	(17) Salaries payable		6400
	(18)
	(19)
	(20) To accrue salaries expense.
(e) Jul. 31	(21) Unearned revenue	1000
	(22) Service revenue		1000
	(23)
	(24)
	(25) To record service revenue that was collected in advance.
(f) Jul. 31	(26) Supplies expense	150
	(27) Office supplies		150
	(28)
	(29)
	(30) To record office supplies used.

2. Net income would be overstated by $7,050.

Transaction	Effect on Net Income
(a)	Overstated	600
(b)	Overstated	200
(c)	Overstated	700
(d)	Overstated	6400
(e)	Understated	1000
(f)	Overstated	150
Total	Overstated	7050