Question

10) Prepare general journal entries on December 31 to record the following unrelated year-end adjustments (18 points). a. Estimated depreciation on equipment for the year, $4,500. b. The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of insurance polides shows $600 of insurance expired. The Prepaid Insurance account has a $2,400 debit balance before adjustment. An examination of insurance policies shows $950 of unexpired insurance. d. The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26, and have worked full days on Monday, Tuesday, and Wednesday, December 29, 30, and 31. e. On November 1, the company received 6 months' rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account. f. The company collects rent monthly from its tenants. One tenant whose rent is $1,000 per month has not paid his rent for December. Date Description Post Debit Credit Ref EX English (United States) to search O JEL

Answer 1

10. Answer:

Adjusting Entries:

	Date	Account title and explanation	Debit	Credit
a	Dec 31	Depreciation expense	$4,500
		Accumulated depreciation-Equipment		$4,500
		[To record depreciation expense]
b	Dec 31	Insurance expense	$600
		Prepaid insurance		$600
		[To record insurance expense]
c	Dec 31	Insurance expense [2400-950]	$1,450
		Prepaid insurance		$1,450
		[To record insurance expense]
d	Dec 31	Salaries and wages expense [3 x $100 x 3days]	$900
		Salaries and wages payable		$900
		[To record accrued salaries expense]
e	Dec 31	Unearned rent revenue	$1,400
		Rent revenue [700 x 2 months]		$1,400
		[To record rent revenue from unearned rent]
f	Dec 31	Rent receivable	$1,000
		Rent revenue		$1,000
		[To record accrued rent revenue]