Question

Record adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year a. Unearned Rent Revenue. The Krug Company collected $14.400 rent in advance on November 1, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 months' rent in advance and occupancy began November 1. b. Unearned Services Revenue. The company charges $145 per insect treatment. A customer paid $580 on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Uneared Services Revenue. At year-end, the company has applied three treatments for the customer. c. Unearned Rent Revenue. On September 1, a client paid the company $40,800 cash for six months of rent in advance (the client leased a building and took occupancy immediately). The company recorded the cash as Uneared Rent Revenue. ok inces View transaction list View journal entry worksheet NO Transaction General Journal Debit Credit 1 4.800

Answer 1

Answer -

a.

No.	Transaction	General Journal	Debit	Credit
1	a.	Unearned rent revenue	$2,400
		Rent revenue		$2,400

Calculation:

Collected rent in advance on November 1 for 12 months’ = $14,400

As per given information, year ended at December 31

So,

Rent revenue for 2 months’ (From November 1 to December 31):

= Collected rent in advance * (2/12 months)

= $14,400 * (2/12)

= $2,400

b.

No.	Transaction	General Journal	Debit	Credit
2	b.	Unearned service revenue	$435
		Service revenue		$435

Calculation:

As per given information,

Company charges for per insect treatment = $145 per treatment

Advanced received for four treatment = $580

But, at year end company charged for three treatments to the customers

So,

Service revenue for 3 treatments = Charges for per insect treatment * 3 treatments

= $145 * 3

= $435

Or

Service revenue for 3 treatments = Advanced received for four treatment * (3/4 treatments)

= $580 * (3/4)

= $435

c.

No.	Transaction	General Journal	Debit	Credit
3	c.	Unearned rent revenue	$27,200
		Rent revenue		$27,200

Calculation:

Rent received in advance for six months on September 1 = $40,800

So,

Rent received for per month = $40,800 / 6 months’

= $6,800 per month

So,

Rent revenue for 4 months (From September 1 to December 31):

= Rent received for per month * 4 months,

= $6,800 per month * 4 months’

= $27,200