Question

P7.2. Certain of the accounts in Gateway Hospital's preadjusted trial balance at December 31, 20X6, are as follows: Acct. No. $ 60,000 102 103 104 -O- 105 Temporary investments Accrued interest receivable Accounts receivable Allowance for uncollectible accounts Prepaid insurance Land Buildings 107 120 130 940,000 3,000 1,800 50,000 4,000,000

Answer 1

Credit ($) Journal No. Date Account Titles and Explanation 31-Dec Interest receivable (60000*8%*3/12) Interest income (To record the interest receivable on bonds for 3 months, Oct to Dec) Debit ($) 1,200 1,200 46,850 31-Dec Bad debt expense (940000-3000)*5% Allowance for uncollectible accounts To record the provision for bad debt) 46,850 300 0.5 is half year out of total of 3 years 31-Dec Insuarance expense (1800*0.5/3) Prepaid insurance (To record the insurance expense incurred for 6 months, June to Dec) 300 90,000 31-Dec Depreciation expense (4000000-400000)/40 Accum. Depr-buildings (To record the annual depreciation on buildings) Salvage value = 4000000 X 10% = 400000 Depreciation (Cost - Salvage Value)/Useful life 90,000 150,000 31-Dec Depreciation expense (1900000-100000)/12 Accum. Depr-equipment (To record the annual depreciation on equipment) 150,000 2,000 31-Dec Interest expense (100000*12%*2/12) Interest payable (To record the interest accrued on notes for 2 months, Nov to Dec) 2,000 2,500 31-Dec Deferred rental income (3000*10/12) Rental income (To record the rent income earned for 10 months, March to Dec) 2,500 Please give as many likes for the hard work.