Question

Prepare the necessary December 31st adjusting journal entries for Fuji Corporation, given the following information: On December1st, Fuji prepaid four months' rent, paying $8,000 and recognizing an asset as Prepaid Rent. Fuji weekly pays its employees on Fridays. This year, December 31st fall on a Wednesday and Fuji's employees earn $4,000 each day. Fuji provides produce delivery services for restaurants. Fuji provided $600 of services to Sonya's Salad Creations, but discovered that it has not been paid. Fuji negotiated a one-year long-term deal with a local university dining center. Fuji is charging the university $400 per month for its delivery services. On October 1st, the university prepaid Fuji for the full upcoming year (through September of the next year), paying Fuji $4,800. On October 1st, Fuji recognized Unearned Revenue

of $4,800

Answer 1

Following adjusting entries are required at reporting date 31st December for Fuji corporation

1) Rent expense. Dr 2000

To Prepaid Rent. Cr 2000

2) Salary expense. Dr 20,000

To Accrued salaries. Cr 20,000

3) Accounts receivable. Dr 600

To Service Revenue. Cr 600

4) Unearned revenue. Dr 1200

To Delivery Service revenue. Cr 1200