Question

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1. 2. 3. Sunland Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2022. Purchased a 1-year insurance policy on June 1 for $1,692 cash. Paid $6,110 on August 31 for 5 months' rent in advance. On September 4, received $3,384 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 Signed a contract for cleaning services starting December 1 for $940 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.) On December 5, received $1,410 in advance from a gaming club. Determined that on December 31, $450 of these games had not yet been played. 4. 5.

Answer 1

Assets + Stockholders' Equity Prepaid Rent Prepaid Cleaning Liabilities Unearned Ser. Rev Common Stock Cash + + + = + + Revenue Dividend Event No. 1 Prepaid Insurance $ 987 $ 4,888 Expenses $ 987 2 $ 4,888 2022 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 3 -$ 1,504 $ 1,504 Insurance Expense Rent Expense Service Revenue Maintenance and Repairs Expense Service Revenue 4 $ 940 $ 940 5 = $ 960 $ 960

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Adjusting Entries:

Credit SL.no General Journal 1 Insurance Expense Prepaid Insurance Debit $ 987 Workings [$1,692/12]*7 $ 987 2 $ 4,888 [$6110/5*4) Rent Expense Prepaid Rent $ 4,888 3 $ 1,504 [$3384/9*4] Unearned Service Revenue Service Revenue $ 1,504 4 $ 940 ($940*1] Maintenace and Repairs Expense Prepaid Cleaning $ 940 5 $ 960 ($1,410-450] Unearned Service Revenue Service Revenue $ 960

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