For each separate case below, follow the three-step process for adjusting the ac

Question

For each separate case below, follow the three-step process for adjusting the accrued revenue account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 Assume no other adjusting entries are made during the year Unearned Rent Revenue. The Krug Company collected $10,200 rent in advance on November 1, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 months rent in advance and occupancy began November 1 Unearned rent revenue Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal Step 3: Record the December 31 adjusting entry to get from step 1 to step 2

Explanation / Answer

1 Determine what the current account balance equals 10200 Unearned Rent Revenue 1-Nov 10200 Adjustment 10200/12*2 1700 31-Dec 8500 10200*10/12 Date General Journal Debit Credit 31-Dec Unearned Rent Revenue 1700 Rent Revenue 1700 2 Determine what the current account balance equals 440 Unearned Rent Revenue 1-Oct 440 Adjustment 440/4*3 330 31-Dec 110 440*1/4 Date General Journal Debit Credit 31-Dec Unearned Service Revenue 330 Service Revenue 330 3 Determine what the current account balance equals 32400 Unearned Rent Revenue 1-Nov 32400 Adjustment 32400/6*4 21600 31-Dec 10800 10200*2/6 Date General Journal Debit Credit 31-Dec Unearned Rent Revenue 10800 Rent Revenue 10800

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