Question

Exercise 3-15 a-c (Part Level Submission) Sheridan Company adjusts its accounts annually. The following information is available for the year ended December 31, 2020 1. Purchased a 1-year Insurance policy on June 1 for $1,680 cash. 2. Paid $5,000 on August 31 for 5 months' rent in advance. 3. On September 4, received $3,780 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school Signed a contract for cleaning services starting December 1 for $850 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.) 5 On December 5, received $1,400 in advance from a gaming club. Determined that on December 31, $600 of these games had not yet been played

Answer 1

Answer:

Adjusting Journal Entry
S.no	Date	Particulars	Dr. Amt.	Cr. Amt.
1	31-Dec	Insurance Expenses	980		$1680 x 7/12
		Prepaid Insurance		980	$1680 x 7/12
		(record the insurance expenses for 7 months)
2	31-Dec	Rent Expenses	4000		$5000 x 4/5
		Prepaid Rent		4000	$5000 x 4/5
		(record the Rent expenses upto Dec)
3	31-Dec	Unearned Service Revenue	1680		$3780 x 4/9
		Service Revenue		1680	$3780 x 4/9
		(Record the revenue recognized for 4 months)
4	31-Dec	Cleaning Expenses	850		$1700 x 1/2
		Prepaid Cleaning Expenses		850	$1700 x 1/2
		(record the cleaning expenses for December)
5	31-Dec	Unearned Service Revenue	800		$1400- $600
		Service Revenue		800	$1400- $600
		(Record the revenue recognized)