Question

Each of the following independent events requires a year-end adjusting entry.

1. Paid $9,100 cash in advance on July 1 for a one-year lease on office space.
2. Purchased $3,300 of supplies on account on April 15. At year-end, $330 of supplies remained on hand.
3. Received a $10,400 cash advance on July 1 for a contract to provide services for one year beginning immediately.
4. Paid $3,100 cash in advance on February 1 for a one-year insurance policy.

Required
Record each event and the related adjusting entry in general journal format. The first event is recorded as an example. Assume a December 31 closing date. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Date	Account Titles	Debit	Credit
July 1	Prepaid rent	9,100
	Cash		9,100
Dec. 31	Rent Expense (9,100 × 6/12)	4,550
	Prepaid rent		4,550

Answer 1

Journal

	Date	Account title	Debit	Credit
b	April 15	Supplies	3,300
		Accounts payable		3,300
	Dec. 31	Supplies expense	2,970
		Supplies		2,970
c	July 1	Cash	10,400
		Unearned service revenue		10,400
	Dec. 31	Unearned service revenue	5,200
		Service revenue		5,200
d	Feb. 1	Prepaid insurance	3,100
		Cash		3,100
	Dec. 31	Insurance expense	2,842
		Prepaid insurance		2,842

b)

Supplies purchased = $3,300

Ending supplies = $330

Supplies expense = Supplies purchased - Ending supplies

= 3,300 - 330

= $2,970

c)

Unearned service revenue received on July 1 for 1 year = $10,400

Unearned service revenue earned on December 31 = 10,400 x 6/12

= $5,200

d)

Insurance expense for 1 year = $3,100

Insurance expense for 11 months = 3,100 x 11/12

= $2,842

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