Question

Preparing Accounting Transactions and Adjustments Sloan Company has the following account balances at December 31, the end of its fiscal year (all accounts have normal balances). $1,680 61,320 4.788 Prepaid advertising Wages expense Prepaid insurance Unearned service fees Service fees earned Rental income 7.560 121,800 6.860 a. Prepare Sloan Company's accounting adjustments at December 31 using journal entries and the following additional information. 1. Prepaid advertising at December 31 is $1,120. 2. Unpaid wages earned by employees in December are $3,640. 3. Prepaid insurance at December 31 is $3,192. 4. Unearned service fees at December 31 are $4,200. 5. Rent revenue of $1,400 owed by a tenant is not recorded at December 31. Date Account Debit Credit 1. Dec. 31 0 0 0 0 To record advertising expense 2. Dec. 31 0 0 0 0 To record accrued wages. 3. Dec. 31 0 0 0 0 To record insurance expense 4. Dec. 31 0 0 0 0 To recognize fees earned 5. Dec. 31 0 0 0 0 To record rent earned but not yet recorded. b. Record journal entries for the following transactions on January 4 of the following year: 1. Payment of $6,720 cash in wages. 2. Cash receipt from the tenant of the $1,400 rent revenue. Note: List any multiple debits or any multiple credits in alphabetical order by account name. Date Account Debit Credit 1. Jan. 4 O O O O O O 0 To record payment of wages. 2. Jan. 4 0 0 0 0 To record collection of rent.

Answer 1

a
	Date	Account	Debit	Credit
1	Dec 31	Advertising expense	560	0	=1680-1120
		Prepaid Advertising	0	560
2	Dec 31	Wages expense	3640	0
		Wages payable	0	3640
3	Dec 31	Insurance expense	1596	0	=4788-3192
		Prepaid Insurance	0	1596
4	Dec 31	Unearned service fees	3360	0	=7560-4200
		Service fees earned	0	3360
5	Dec 31	Rent receivable/Accounts Receivable	1400	0
		Rental income	0	1400
b
	Date	Account	Debit	Credit
1	Jan 4	Wages expense	3080	0
		Wages payable	3640	0
		Cash	0	6720
2	Jan 4	Cash	1400	0
		Rent receivable/Accounts Receivable	0	1400