4. Below are four transactions that were completed during 2009 by Timber Lodge.

Question

4. Below are four transactions that were completed during 2009 by Timber Lodge. The annual accounting period ends on December 31. Each transaction will require an adjusting entry at December 31, 2009. You are to provide the 2009 adjusting entries required for Timber Lodge.
A. On July 1, 2009, Timber Lodge paid a two-year insurance premium for a policy on its facilities. This transaction was recorded as follows:
july 1 2009
prepaid insurance      8000
cash                                    8000
B. On December 31, 2009 a tenant renting some storage space from Timber Lodge had not paid the rent of $750 for December 2009.

C. On September 1, 2009, Timber Lodge borrowed $25,000 cash and gave a one-year, 10 percent, note payable. The total interest of $2,500 is payable on the due date, August 31, 2010. The note was recorded as follows:
sept 1 2009 cash            25000
Note payable            25000

D. On October 1, 2009, Timber Lodge collected $3,600 for rental of space two years in advance. The $ 3600 was recorded as follow Oct. 1 2009 cash                              3600 Unearned rent Revenue                     3600 4. Below are four transactions that were completed during 2009 by Timber Lodge. The annual accounting period ends on December 31. Each transaction will require an adjusting entry at December 31, 2009. You are to provide the 2009 adjusting entries required for Timber Lodge.
A. On July 1, 2009, Timber Lodge paid a two-year insurance premium for a policy on its facilities. This transaction was recorded as follows:
july 1 2009
prepaid insurance      8000
cash                                    8000
B. On December 31, 2009 a tenant renting some storage space from Timber Lodge had not paid the rent of $750 for December 2009.

C. On September 1, 2009, Timber Lodge borrowed $25,000 cash and gave a one-year, 10 percent, note payable. The total interest of $2,500 is payable on the due date, August 31, 2010. The note was recorded as follows:
sept 1 2009 cash            25000
Note payable            25000

D. On October 1, 2009, Timber Lodge collected $3,600 for rental of space two years in advance. The $ 3600 was recorded as follow Oct. 1 2009 cash                              3600 Unearned rent Revenue                     3600

Explanation / Answer

A. DR Insurance expense 2,000 CR Prepaid insurance 2,000 Amortize six months prepaid insurance B. DR Accounts receivable 750 CR Rent Revenue 750 Accrue unpaid rent revenue C. DR Interest expense 833.33 CR Interest Payable 833.33 Accrue interest expense for Sep-Dec D. DR Unearned rent revenue 450 CR Rent revenue 450 Recognize rent revenue Oct-Dec.

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