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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 52
Categorizing and journalizing adjusting entries
Consider the following independent situations at December 31, 2014.
a. On August 1, a business collected $3,300 rent in advance, debiting Cash and crediting Unearned rent revenue. The tenant was paying one year's rent in advance. At December 31, the business must account for the amount of rent it has earned.
b. Salary expense is $1,700 per day-Monday through Friday-and the business pays employees each Friday. This year December 31 falls on a Thursday.
c. The unadjusted balance of the Supplies account is $3,500. Supplies on hand total $1,700.
d. Equipment depreciation was $300.
e. On March 1, when the business prepaid $600 for a two-year insurance policy, the business debited Prepaid insurance and credited Cash.
Requirements
1. For each situation, indicate which category of adjustment is described.
2. Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.
Consider the following independent situations at December 31, 2014.
a. On August 1, a business collected $3,300 rent in advance, debiting Cash and crediting Unearned rent revenue. The tenant was paying one year's rent in advance. At December 31, the business must account for the amount of rent it has earned.
b. Salary expense is $1,700 per day-Monday through Friday-and the business pays employees each Friday. This year December 31 falls on a Thursday.
c. The unadjusted balance of the Supplies account is $3,500. Supplies on hand total $1,700.
d. Equipment depreciation was $300.
e. On March 1, when the business prepaid $600 for a two-year insurance policy, the business debited Prepaid insurance and credited Cash.
Requirements
1. For each situation, indicate which category of adjustment is described.
2. Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.
Explanation
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Journalizing is the chronological accoun...
Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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