Question

Crane Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2022.

1.		Purchased a 1-year insurance policy on June 1 for $1,872 cash.
2.		Paid $6,760 on August 31 for 5 months’ rent in advance.
3.		On September 4, received $3,744 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school.
4.		Signed a contract for cleaning services starting December 1 for $1,040 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.)
5.		On December 5, received $1,560 in advance from a gaming club. Determined that on December 31, $500 of these games had not yet been played.

For each of the above transactions, record the adjustment that is required on December 31 in the tabular summary from part (a). (Hint: Use the account Service Revenue for item 3 and Repairs and Maintenance Expense for item 4.) (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

2022 Cash + Prepd. Insur. + Prepd. Rent + Prepd. Clean. = Unearned Serv. Rev. + Com. stock+ Rev. - Exp - Div.

1. Dec 31

2. Dec 31

3. Dec 31

4. Dec 31

5. Dec 31

Answer 1

Accounting records

2022

Cash

+

Prepd Insur

+

Prepd rent

+

Prepd clean

=

Unearned serv rev

+

Com Stock

+

Rev

-

Exp

-

Div

Dec 31

-1092

-1092

Dec 31

-5408

-5408

Dec 31

-1664

1664

Dec 31

-1040

-1040

Dec 31

-1060

1060