Journalizing adjusting entries Consider the following independent situations at December 31: a. On October 1, a business collected $3,000 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year’s rent in advance. On December 31, the business must account for the amount of rent it has earned. b. Salaries expense is 81,800 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 Office Supplies account is $3,000. Office supplies on hand total $1,900. d. Equipment depreciation was $500. e. On April 1, when the business prepaid 54,320 for a two-year insurance policy, the business debited Prepaid Insurance and credited Cash. Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter3: Accrual Accounting
Section: Chapter Questions
Problem 52E: Adjusting Entries Exercise 3-52 Allentown Services Inc. is preparing adjusting entries for the year...
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Journalizing adjusting entries

Consider the following independent situations at December 31:

a. On October 1, a business collected $3,000 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year’s rent in advance. On December 31, the business must account for the amount of rent it has earned.

b. Salaries expense is 81,800 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 Office Supplies account is $3,000. Office supplies on hand total $1,900.

d. Equipment depreciation was $500.

e. On April 1, when the business prepaid 54,320 for a two-year insurance policy, the business debited Prepaid Insurance and credited Cash.

Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.

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