Question

Each of the following independent events requires a year-end adjusting entry.

1. Paid $9,900 cash in advance on July 1 for a one-year lease on office space.
2. Purchased $3,400 of supplies on account on April 15. At year-end, $270 of supplies remained on hand.
3. Received a $8,800 cash advance on July 1 for a contract to provide services for one year beginning immediately.
4. Paid $3,800 cash in advance on February 1 for a one-year insurance policy.

Required
Record each event and the related adjusting entry in general journal format. The first event is recorded as an example. Assume a December 31 closing date. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Date	Account Titles	Debit	Credit
July 1	Prepaid rent	9,900
	Cash		9,900
Dec. 31	Rent Expense (9,900 × 6/12)	4,950
	Prepaid rent		4,950

• 1

• Record supplies purchase on account.

• 2

  Record adjusting entry for supplies expenses.

• 3

  Record cash received in advance for services to be provided.

• 4

  Record adjusting entry for unearned revenue.

• 5

  Record cash paid in advance for a one-year insurance policy.

• 6

  Record adjusting entry for prepaid insurance.

Answer 1

Journal entry

No	General Journal	Debit	Credit
1	Supplies	3400
	Account payable		3400
	(To record purchase supplies)
2	Supplies expense (3400-270)	3130
	Supplies		3130
	(To record adjusting entry)
3	Cash	8800
	Unearned revenue		8800
	(To record unearned revenue)
4	Unearned revenue (8800/2)	4400
	Revenue earned		4400
	(To record revenue earned)
5	Prepaid insurance	3800
	Cash		3800
	(To record insurance paid)
6	insurance expense (3800*11/12)	3483
	Prepaid insurance		3483
	(to record insurance expense)