Question

75 Required Information [The following information applies to the questions displayed below) All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December 31 a. On September 1 of the current year, Zimmerman collected six months' rent of $7,800 on storage space. At that date. Zimmerman debited Cash and credited Unearned Rent Revenue for $7.800. b. On October 1 of the current year, the company borrowed $14,400 from a local bank and signed a one-year, 14 percent note for that amount. The principal and interest are payable on the maturity date. c Depreciation of $3.200 must be recognized on a service truck purchased in July or the current year at a cost of $19,000 d. Cash of $5,400 was collected on November or the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received e. On November 1 of the current year, Zimmerman paid a one-year premium for property Insurance, $9.960, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount The company earned service revenue of $3,000 on a special job that was completed December 29 of the current year. Collection will be made during January or the next year. No entry has been recorded 9. At December 31 of the current year, wages earned by employees totaled $13,900. The employees will be paid on the next payroll date in January of the next year h On December 31 of the current year, the company estimated it owed $440 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.

Answer 1

Adjusting Entries: EVENT CREDIT DEBIT $5,200 $5,200 [$7,800 x (4/6)] [Sep. thru Dec. out of 6 months) ($14,400 x 14% < (3/12)] [Oct. thru Dec. out of 12 months] $504 $504 $3,200 $3,200 $900 DATE ACCOUNT TITLES Dec. 31 Unearned Rent Revenue Rent Revenue Dec. 31 Interest Expense Interest Payable Dec. 31 Depreciation Expense Accumulative Depreciation - Service Truck/ Dec. 31 Unearned Service Revenue Service Revenue Dec. 31 Insurance Expense Prepaid Insurance Dec. 31 Accounts Receivable Service Revenue Dec. 31 Salaries and Wages Expense Salaries and Wages Payable Dec. 31 Property Tax Expense Property Tax Payable $900 [$5,400 x (2/12)] [Nov. thru Dec. out of 12 months] ($9,960 x (2/12)] [Nov. thru Dec. out of 12 months) $1,660 $1,660 $3,000 $3,000 $13,900 $13,900 $440 $440