The following events relating to salaries occurred in King Company near December 31, the end of the
Question:
The following events relating to salaries occurred in King Company near December 31, the end of the fiscal year. LO8 Dec. 27 Recorded payment of regular weekly salaries of $3,000.
Dec. 31 Prepared an adjusting entry for accrued salaries of $1,200.
Jan. 1 Made a reversing entry for accrued salaries.
Jan. 3 Recorded payment of regular weekly salaries of $3,000.
King Company rents a portion of its building to a tenant for $2,100 a month payable in advance on the twenty-first of each month. The tenant is often late in making the payments. Year-end transactions relating to rent revenue were as follows.
Dec. 31 Recorded accrued rent revenue of $700 for the period December 21-
December 31.
Jan. 1 Made a reversing entry for accrued rent revenue.
Jan. 4 Recorded collection of $2,100 rent for period December 21-January 21.
Instructions a Prepare journal entries (with explanations) for the four events relating to salaries.
b How much of the $3,000 in salaries paid on January 3 represents a January ex¬
pense? Explain.
c Assume that no reversing entry was made by King Company; prepare the journal entry for payment of salaries on January 3.
d Prepare journal entries (with explanations) for the three events relating to rent revenue.
e How much of the $2,100 rent received on January 4 represents January revenue?
Explain.
f Assume that no reversing entry was made by King Company with respect to rent;
prepare the journal entry to record collection of $2,100 rent on January 4.
Step by Step Answer:
Accounting The Basis For Business Decisions
ISBN: 9780070415515
5th Edition
Authors: Robert F. Meigs, Walter B Meigs