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File Edit View History Bookmarks Window Help a newco tion.com Saved W3-26 7 Record adjusting journal entries for each of the following for year ended December 31 Assume no other adjusting entries are made during the year a. Unearned Rent Revenue. The Krug Company collected $7,200 rent in advance on 14 oints November 1, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 months' rent in advance and occupancy began November 1 Skipped b. Unearned Services Revenue. The company charges $85 per month to spray a house for insects. A customer paid $340 on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Unearned Services Revenue. At year-end, the company has applied three treatments for the customer Referencesc. Unearned Rent Revenue. On September 1, a client paid the company $26,400 cash for six months of rent in advance (the client leased a building and took occupancy immediately). The company recorded the cash as Unearned Rent Revenue. View transaction list Journal entry worksheet The Krua Companv collected $7.200 rent in advance on November 1. debitina 4

Explanation / Answer

A:

Explanation: The amount of $7,200 is for 12 months. Thus monthly rent = 7200/12 = $600. Rent for the months of November and December = 600*2 = $1,200. This amount will be recognized as rental revenue for this year.

B:

Explanation: Total advance for 4 treatments = $340. Treatments provided till 31st December = 3. Thus revenue earned that will be recorded in books will be = 340/4*3 = 255

C:

Explanation: Rental income fro the months of September to December (i.e. 4 months) will have to be recognized. Amount will be = 26400/6*4 = 17600

Date General Ledger Debit Credit 31-Dec Unearned Rent Revenue 1,200.00 Rent Revenue 1,200.00

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