Question

A review of the ledger of Ivanhoe Company at December 31, 2017. produces these data pertaining to the preparation of annual adjusting entries 1. Prepaid Insurance $21,473. The company has separate insurance polides on its buildings and its motor vehicles Policy 14564 on the building was purchased on July 1, 2016 for $13,110. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2017, for $10.548. This policy has a term of 18 months. 2. Uneamed Rent Revenue $602,160. The company began subleasing office space in its new building on November 1. A December 31, the company had the following rental contracts that are paid in all for the entire term of the lease Number of Leases Date Nov. 1 Dec. 1 (in months) Monthly Rent $5,020 $8,360 10 3. Notes Payable $40,800. This balance consists of a note for 6 months at an annual interest rate of dated October 1. 4. Salaries and Wages Payable $0. There are 10 salaried employees. Salaries are paid every Friday for the current week. S employees receive a salary of 5630 each per week, and earn $715 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December employees Prepare the adjusting entries at December 31, 2017. (If no entry is required select "No Entry for automatically Indented when the amount is entered. Do not Indent manually.) To for the amounts Credit account titles are No. Account Titles and Explanation 1. Insurance Expense - Prepaid Insurance Uneamed Rent Revenue - Rent Revenue Interest Expense - Interest Payable Salaries and Wages Expense

Answer 1

The journal entries are recorded based on accounting rules in which all expenses, assets, losses are debited for increase and revenue, liabilities, equity, gain are credited for increase
Adjusting journal entries are reflected below
No	Account titles and Explanation	Debit	Credit
1.	Insurance expense	$11,402
	Prepaid insurance		$11,402
	(13110*1/3)+(10548*12/18)
	(To record insurance expense)
2	Unearned rent	$110,400
	Rent revenue		$110,400
	(2*5020*6)+(1*8360*6)
	(To record rent revenue earned)
3	Interest expense	$714
	Interest payable		$714
	(40,800*7%*3/12)
	(To record accrued interest on notes payable)
4	Salaries and wages expense	$4,035
	Salaries and wages payable		$4,035
	(5*630*3/5)+(5*715*3/5)
	(To record salaries and wages expense)