Section 5 On October 1, your calendar year company signs a $20,000 contract to h

Question

Section 5 On October 1, your calendar year company signs a $20,000 contract to have its offices painted and makes a down-payment of s14,000 that you recorded in Painting Expense. If, on December 31, record? management informs you that 25% of the work has been completed,what adjusting entry will you a. a debit to Painting Expense for $5,000 b. a credit to Painting Expense for $9,000 c. a debit to Painting Expense for $9,000 d. a credit to Painting Expense for $5,000 3. 4. Your calendar year company pays $12,000 a year for security services. On November 1, you remit payment for the next 3 months' service and record it in Prepaid Security Expense. At year end, what adjusting entry will you record? a. Prepaid Security Expense b. Security Expense c. Security d. Prepaid Security Expense Security Expense Prepaid Security Expense Prepaid Security Expense Cash 1,000 2,000 3,000 2,000 ty Expenscurity Expense 1,000 1,000 3,00 1,000 Prepaid Rent. At year end, what adjusting entry will you record? 4,000 On September 1, your calendar year company pays $12,000 for 1 year's rent that you debit to a. Prepaid Rent b. Rent Expense c. Rent Expense d. Prepaid Rent 5. 4,000 Rent Expense Cash Prepaid Rent Rent Expense 4,000 4,000 4,000 8,000 4000 8,000 Section 6 A plant asset with an original cost of $121,875 and a residual value of $15,000 has a useful life of 9 years. Under the straight-line method, the journal entry to record the annual depreciation expense is: a. Depreciation Expense 1. 13,542 Accumulated Depreciation 13,542

Explanation / Answer

3) as painting expense 20,000*25%= 5000 painting expense already debited by 14,000 so excess debited by 14,000-5000 = $9000 hence credit painting expense for 9000 to get the actual expense of $5,000 Answer - option b 4) rent per month = 12000/12 = 1000 Security expensed = 1000*2 = $2000 that is for two months of November and December hence we need to debit security expense with $2,000 and credit prepaid security expense with $2,000 Answer option -b 5) rent per month 12000/12=1000 Adjusting entry is needed for Sept to dec 1000*4 = $4000 answer option -C

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