2. Assume the same facts as in (1) above, except the bookkeeper made the following entry on April 1: Dr. 18,000 Rent expense Cash 18,000 The bookkeeper did not make any adjusting entries related to this amount before December 31. Required: a. Calculate the adjusted ending balance in the Prepaid Rent account and the Rent Expense account at December 31. 18.000 X 13.500 b. Prepare t-accounts showing the April 1 transaction, the adjustment to be made at December 31, and the ending balances in Prepaid Rent and Rent Expense. Prepaid Rent Rent Expense 1 ,000 c. Prepare the general journal adjusting entry for December 31. 110 Prepayments As Corporation leased a building for one year on April 1 for SIS,000. The company or the entire year on April 1. Ajax's bookkeeper made the following entry on April Cr. Dr. Rent expense 1.500 Prepaid rent 16,500 Cash 18.000 Assume it is now December 31. Ajax has not made any adjusting entries before December 31. Required: a. Calculate the adjusted ending balance in the Prepaid Rent account and the Rent Expense account at December 31. b. Prepare l-accounts showing the April 1 transaction, the adjustment to be made at December 31, and the ending balances in Prepaid Rent and Rent Expense. Prepaid Rent Rent Expense c. Prepare the general journal adjusting entry for December 31. 109 4 Adjusting entries. Enter the correct adjusting entries for the following items provided. If no entry is required, write "NONE" of October 31 in the journal The company has received a bill for utilities for the month in the amount of $1.750. This bill will be paid next month. Interest on a loan at the bank is due as of November 1. We borrowed 55.000 three months ago at 696 interest. A customer paid us S600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tells us that one-third of the merchandise has been shipped and received by the customer. Depreciation on the trucks was last recorded a year ago. The trucks cost $75,000, have a $5,000 salvage value, and are estimated to last for seven years. The Prepaid Advertising account has a balance of $2,300. Of this amount, we have used $950 this month. Date General Journal Post Ref. Debit Description Credit SLOO Mbles Rayade SOOD con bon Leo for one year on April 1 for $18,000. The keeper made the following entry on April 4-5. Adjusting entries. For each of the following adjusting entries, identify whether the entry is correct. If it is not correct, provide the correct entry in the journal on the next page and specify why the entry given below is wrong. wid sum Depreciation Expense Accumulated Depreciation 1,500 1,500 To record depreciation on trucks for one year. The trucks cost $30,000 and have no salvage value. They are being depreciated straight line over six years. Interest Revenue Interest Receivable 730 730 To record one year's interest on a loan to an officer of the company. The loan was for $10,000 at 7% interest. Supplies Expense Supplies 563 563 The Supplies account started with a balance of $1,900. At the end of the period, a count of remaining supplies indicated we had S563 left. Wages Expense Wages Payable 1,900 1,900 Employees have earned $1,900 since last payday. Taxes Payable 700 Taxes Expense 700 The company received a bill from the County Treasurer for $700 for property taxes. The taxes are due next month