Question

Required information For each of the following transactions for the Sky Blue Corporation: a. Collected $5,250 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1. b. Paid $3,480 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. c. Used a machine purchased on October 1 for $59,400. The company estimates annual depreciation of $5,940. Prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) No Transaction General Journal Debit Credit 1 a 5250 Prepaid Rent Deferred Revenue ® ® 5,250 2 b 3,480 Prepaid Insurance Insurance Expense X ® 3,480 3 с 5,940 X Depreciation Expense Accumulated Depreciation O 5,940

Answer 1

Solution

No	Transaction	General Journal	Debit	Credit
1	a	Deferred Revenue	$   1,750
		Rent revenue		$    1,750
		(To record rent revenue for 1 month)
2	b	Insurance expense	$       145
		Prepaid insurance		$       145
		(To record insurance expense)
3	c	Depreciation expense	$       495*
		Accumulated depreciation)		$       495
		(To record depreciation expense)

*5940/12 x 1