a. On September ?1, when we collected ?$66 comma 000 rent in? advance, we debite
ID: 2408381 • Letter: A
Question
a. On September ?1, when we collected ?$66 comma 000 rent in? advance, we debited Cash and credited Unearned Rent Revenue. The tenant was paying one? year's rent in advance. At December? 31, we must account for the amount of rent we have earned. b. Interest revenue of ?$3 comma 400 has been earned but not yet received on a ?$50 comma 000 note receivable held by the business. c. Salary expense is ?$9 comma 300 per daylong dashMonday through Fridaylong dashand the business pays employees each Friday. This year December 31 falls on a Wednesday. d. Equipment was purchased last year at a cost of ?$325 comma 000. The? equipment's useful life is five years. It will have no value after five years. Record the? year's amortization. e. On March ?1, when we paid ?$7 comma 800 for a? one-year insurance? policy, we debited Prepaid Insurance and credited Cash. f. The business owes interest expense of ?$9 comma 000 that it will pay early in the next period. g. The unadjusted balance of the Supplies account is ?$13 comma 500. The total cost of supplies remaining on hand on December 31 is ?$6 comma 000.
Explanation / Answer
Journal Entries
Particulars
Amount
($)
Amount
($)
Description
Particulars
Amount
($)
Amount
($)
Description
a. Unearned Rent a/c Dr 22,000 Advance for 4 months from Sep to Dec 66000*4/12=22000 To Rent a/c 22,000 [Being Rent earned in advance for the month from Sep to Dec recorded] b. Interest receivable a/c Dr 3,400 To Interest Income a/c 3,400 [Being interest income earned but not received recorded at the year end] c. Salary expense a/c Dr 37,200 Salary for Monday to Thursday ie 4 days is 9,300*4=37,200 To Salary payable a/c 37,200 [Being Salary payable for the last week of december recorded] d. Depreciation a/c Dr 65,000 Depreciation= (Cost-Salvage)/Life ie 325,000/5=65,000 To Equipment a/c 65,000 [Being depreciation of equipment for the year recorded] e. Insurance Expense a/c Dr 1,300 Insurance cost for 2 months is 7800*2/12=1300 To Pre paid insurance 1,300 [Being insurance cost for two months amortised] f. Interest expense a/c Dr 9,000 To Interest payable a/c 9,000 [Being interest payable but not paid recorded] g. Consumed supplied a/c Dr 7,500 The difference of 13500 and 6000 is consumed To Supplies a/c 7,500 [Being consumed supplies recorded]Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.