Question

5. Several transactions for Kincaid Co. are presented below. The company adjusts its books only at its year-end, December 31. (8 pts.) On February 1, Kincaid Co. leased a warehouse to another company for $48,000 for a three-year period. Kincaid Co. received a check for $48,000 on February 1, and credited Rent Income for the full amount of the check. What adjustment is required on December 31, to reflect the correct amount of rent earned for the period from February 1, to December 31? On September 1, Kincaid Co. prepaid delivery expense of $6,000 to a local trucking company that will provide delivery services for the next two years. The delivery services will be provided at the same rate each month. Kincaid charged Prepaid Delivery Expense when it made the payment on September 1. What adjustment is needed on December 31, to show how much of the $6,000 has been used up? On May 1, the company borrowed $10,000 on a 12%, one-year note. What is the entry to record interest expense as of December 31? On March 10, Kincaid Co. bought $300 of office supplies and debited the Office Supplies account. At the beginning of the year, January 1, Office Supplies had a balance of $50. At the end of the year, December 31, there were $64 of office supplies on hand. What is the entry needed to record Office Supplies Expense as of December 31? d.

Answer 1

Kincaid Company Journal Enteries Trans. Particulars a Rent Income Unearned Rent Revenue 48000 x 25/36 Debit in $ Credit in $ 33333 33333 b 1000 Delivery Expense Prepaid Delivery Expense 6000 x 4/24 1000 с 800 Interest Expense Interest Payable 10000 x 12% x 8/12 800 d. 286 Office Supplies Expense Office Supplies 50 + 300 - 64 286