Question

The December 31, 2021, unadjusted trial balance for Demon Deacons Corporation is presented below. Credit Debit $10,000 15,000 7,200 4,000 Accounts Cash Accounts Receivable Prepaid Rent Supplies Deferred Revenue Common Stock Retained Earnings Service Revenue Salaries Expense $ 3,000 11,000 6,000 51,200 35,000 $71,200 $71,200 At year-end, the following additional information is available: 1. The balance of Prepaid Rent, $7,200, represents payment on October 31, 2021, for rent from November 1, 2021, to April 30, 2022 2. The balance of Deferred Revenue, $3,000, represents payment in advance from a customer. By the end of the year, $750 of the services have been provided. 3. An additional $700 in salaries is owed to employees at the end of the year but will not be paid until January 4, 2022. 4. The balance of Supplies, $4,000, represents the amount of office supplies on hand at the beginning of the year of $1,700 plus an additional $2,300 purchased throughout 2021. By the end of 2021, only $800 of supplies remains. Required: 1. Update account balances for the year-end information by recording any necessary adjusting entries. No prior adjustments have been made in 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field. Do not round intermediate calculations.)

Answer 1

Date	General Journal	Debit	Credit
December 31	Rent expense	2,400
	Prepaid rent		$2,400
	( To record rent expense)
December 31	Deferred revenue	$750
	Service revenue		$750
	( To record service revenue)
December 31	Salaries expense	$700
	Salaries payable		$700
	( To record salaries expense)
December 31	Supplies expense	$3,200
	Supplies		$3,200
	( To record supplies expense)

1.

Rent expense for 6 months = $7,200

Rent expense for 2 months ( November and December) = 7,200 x 2/6

= $2,400

4.

Supplies expense = Beginning supplies + Supplies purchases - Ending supplies

= 1,700+2,300-800

= $3,200

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