Question

Hilltop Apartments, Inc. adjusts and closes it books at the end of each calendar year. Assume the accounts for all prior years have been properly adjusted and closed. Following are some of the company's account balances prior to the adjustments on December 31, 2020: Debits Credits $4,200 $2,700 $360,000 Prepaid Insurance Supplies on Hand Buildings Accumulated Depreciation Unearned Rent Salaries Expense Rental Revenue $49,583 $27,000 $122,000 $324,126 1. The prepaid insurance account balance represents the remaining amount of a $7,200 three-year insurance policy that was paid some time in 2019. 2. It is estimated that the supplies on hand at December 31, 2020 have a cost of $600. 3. The building was originally acquired several years back, has a salvage value of $20,000, and has been depreciated annually using the straight-line method. It originally had an estimated useful life of 40 years. 4. Interest earned by Hilltop on a bank account, but not yet received as of December 31, 2020 amounts to $236. 1/2

#5. The unearned rent account arose through the pre-payment of rent by a tenant in the building for a 12 month period beginning August 1, 2020

REQUIRED: prepare the annual year and adjusting journal entries indicated by the data above

Answer 1

Debit ($) Credit ($) 2,400 2,400 2,100 2,100 8,500 Date Account Title & Explanation Dec, 31 Insurance Expense Prepaid Insurance (To Record Insurance Expense- 7,200/3) Dec 31 Supplies Expense Supplies on Hand (To Record Supply Expenses) Dec 31 Depreciation Expense Accumulated Depreciation (To Record Depreciation Expense) Dec, 31 Interest Receivable Interest Income (To Record Interest Income) Dec 31 Unearned Rent Rental Revenue (To Record Rental Income - 27,000/12*5) 8,500 236 236 11,250 11,250