Respuesta :
Answer: Incomplete Question but now completed below:
Required:
1. Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue or accrued expense.
2. Give the adjusting entry for each transaction as at 31st December.
Explanation:
1. On September 1 of the current year, Zimmerman collected six months' rent of $8,760 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,760. It is a deferred revenue
2. On October 1 of the current year, the company borrowed $19,200 from a local bank and signed a one-year, 11 percent note for that amount. It is an accrued expense.
3. Depreciation of $2,000 must be recognized on a service truck purchased in July of the current year at a cost of $20,000. Deferred Expense
4. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year . Deferred Income.
5. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,600, for coverage starting on that date. Deferred Expense.
6. The company earned service revenue of $3,000 on a special job that was completed December 29 of the current year. Accrued Income/revenue.
7. At December 31 of the current year, wages earned by employees totaled $14,300. The employees will be paid on the next payroll date in January of the next year. Accrued salaries & wages
8. On December 31 of the current year, the company estimated it owed $590 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year. Accrued Expenses(Tax)
2. Journal Entries
1. On September 1 of the current year, Zimmerman collected six months' rent of $8,760 on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue for $8,760.
Cr: Unearned rent revenue $5,840
Dr: Rent Revenue $5,840 (8760/6*4(sep-dec))
2. On October 1 of the current year, the company borrowed $19,200 from a local bank and signed a one-year, 11 percent note for that amount. The principal and interest are payable on the maturity date.
Dr: Bank $19,200
Cr: Loan a/c $19,200
3. Depreciation of $2,000 must be recognized on a service truck purchased in July of the current year at a cost of $20,000. Deferred Expense
Cr: Depreciation expense $2,000
Dr: Accumulated Depreciation $2000
4. Cash of $3,600 was collected on November of the current year, for services to be rendered evenly over the next year beginning on November 1 of the current year. Unearned Service Revenue was credited when the cash was received.
Dr: Unearned Service Revenue $600
Cr: Service revenue $600 (3600/12*2)
5. On November 1 of the current year, Zimmerman paid a one-year premium for property insurance, $9,600, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount
Cr: Prepaid Insurance $1,600
Dr: Insurance expenses $1,600 (9600/12*2)
6. The company earned service revenue of $3,000 on a special job that was completed December 29 of the current year. Collection will be made during January of the next year.
Dr: Service Income $3,000
Cr: Accrued Income $3,000
7. At December 31 of the current year, wages earned by employees totaled $14,300. The employees will be paid on the next payroll date in January of the next year.
Dr: Accrued Salaries and wages $14,300
Cr: Salaries & wages expenses $14,300
8. On December 31 of the current year, the company estimated it owed $590 for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.
Dr: Accrued Property Tax $590
Cr: Property tax Expenses $590
