Question

Manuel Nunez is in the business of generating rental revenue. The following information relates to his business: Manual Nunez Realty, at the dose of the fiscal year ending December 31: 1. Manuel purchased three months of advertising in the local newspaper on November 1. Each month $400 of the advertising is used. 2. On November 1, Manuel signed a 3-month, 5% note payable to borrow $18,600 from TD Bank. Interest is payable at the maturity of the note. 3. Salaries due and unpaid at December 31 total $2,100. 4. Interest of $500 has accrued to date, on a note receivable that Manuel holds from Grant Thursten. 5. There is $100 of supplies on hand at year end. The unadjusted balance of the supplies account is $500. 6. Manuel has not yet paid the December rent of $1,500 on the building his business uses. (Do not use accounts payable) Insurance was paid on November 1 for one year and charged to Prepaid Insurance, $1,038. 8. Property taxes that have accrued are in the amount of $1,100. 9. On December 1, Manuel gave Laura Palmer a 2-month, 8% note payable to settle $7,200 on accounts payable. Interest is payable at the maturity of the note. 10. On October 31, Manuel received $2,265 from Douglas Raines in payment of six months' rent for Raines's office space in the building and credited Unearned Revenue. 11. The bill from Capital Hydro for December has been received but not yet entered or paid, $400. 12. The depreciation on furniture for the year is $1,400. Prepare annual adjusting entries as of December 31. (Credit account titles are automatically indented whe required, select "No Entry for the account titles and enter for the amounts.) ount is entered. Do not indent manually. If no entry No. Account Titles and Explanation Debit Credit

Answer 1

Manual Nunez Adjusting Enteries Debit in $ Credit in $ Trans. Particulars Advertising Expense a/c Dr. To Prepaid Advertising |(Advertising expensed) 400 x 2 800 800 Interest Expense a/c To Interest Payable 2 Dr. 155 155 (Interest accrued) 18600 x 5% x 2/12 Salaries Expense a/c To Salaries Payable 3 Dr. 2100 2100 |(Salary accrued) Interest Receivable a/c Dr. 500 To Interest Revenue 500 (Interest income accrued) Supplies Expense a/c 5 Dr. 400 To Supplies 400 (Supplies expensed) 500 - 100 Rent expense a/c To Rent Payable Dr. 1500 1500 (Rent accrued) Insurance Expense a/c Dr. 1038 To Prepaid Insurance 1038 (Insurance expensed) Property Tax expense a/c Dr. 1100 To Property Tax Payable 1100 |(Expense accrued) Interest Expense a/c To Interest Payable Dr. 48 48 (Interest accrued) 7200 x 8% x 1/12 Unearned Revenue a/c 10 Dr. 1133 To Rent Revenue 1133 (Rent revenue earned) Utility Expense a/c To Utility Payable 11 Dr. 400 400 (Expense accrued) Depreciation Expense a/c 12 Dr. 1400 To Accum. Depre - Furn. 1400 (To record depreciation)