Question

1. A tenant makes a $1485 payment on December 28th to pay $35 for a billed November late charge and $1450 for January rent. Provide the journal entry for the cash receipt for both cash and accrual accounting.

2. A $1200 check is written on January 2nd for an annual maintenance contract for the period of January to December. Provide the journal entry for the cash disbursement for both cash and accrual accounting.

3. A $1,000,000 check is received as an additional investment in the company. Provide the journal entry.

4. Provide the journal entry to book $50,000 of building depreciation.

5. Provide the journal entry to record $2,500 of incurred interest that has not been paid.  

6. How would you record interest income received during the construction period of a development project?

7. A tenant pays a $3,000 refundable security deposit to be held in a separate cash account.  Provide the journal entry to record receipt of the security deposit?

8. What action would you need to take to reconcile a bank statement for each of the following:

• Outstanding checks
  • Add to BOOK balance
  • Deduct from BOOK balance
  • Add to BANK balance
  • Deduct from BANK balance
• Deposit in transit
  • Add to BOOK balance
  • Deduct from BOOK balance
  • Add to BANK balance
  • Deduct from BANK balance

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. 1,485.00 Cash Basis of Accounting Cash Rent Revenue Late Charges (To record collection of January Month rent and November |month late charges under cash Basis of accounting) 1,450.00 35.00

Journal Entries Date Account Title and Explaination Post. Debit Credit Ref. a $ 1,485.00 Dec.28 Accrual Basis of Accounting Cash Unearned Rent Revenue Late Charges (To record collection of January Month rent and November month late charges under Accrual Basis of accounting) 1,450.00 35.00

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. 1,200.00 Cash Basis of Accounting Annual Maintenance Expense Cash (To record Payment of annual maintenance expenses for the year under Cash Basis of accounting) 1,200.00

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. 1,200.00 Accrual Basis of Accounting Prepaid Annual Maintenance Cash (To record Payment of annual maintenance expenses for the year under Accrual Basis of accounting) $ 1,200.00

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. с $ 1,000,000.00 Cash Capital (To record additional investment received) $ 1,000,000.00 $ 50,000.00 Depreciation Expense - Building Accumulated Depreciation - Building (To record Depreciation on Building) $ 50,000.00 2,500.00 Interest Expense Interest Payable (To record interest Expense incurred) 2,500.00