Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A review of the ledger of Sheridan Company at December 31, 2022, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid

A review of the ledger of Sheridan Company at December 31, 2022, produces these data pertaining to the preparation of annual adjusting entries.

1. Prepaid Insurance $20,185. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2021, for $12,990. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2022, for $9,360. This policy has a term of 18 months.
2. Unearned Rent Revenue $478,860. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

Term (in months)

Number of Leases

Date

Monthly Rent

Nov. 1

9 $5,090 6

Dec. 1

6 $8,500 4

3. Notes Payable $46,800. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1.
4. Salaries and Wages Payable $0. There are 12 salaried employees. Salaries are paid every Friday for the current week. 6 employees receive a salary of $630 each per week, and 6 employees earn $720 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December.

Prepare the adjusting entries at December 31, 2022. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

1.

Insurance Expense enter a debit amount

enter a credit amount

Prepaid Insurance enter a debit amount

enter a credit amount

2.

Unearned Rent Revenue enter a debit amount

enter a credit amount

Rent Revenue

enter a debit amount

enter a credit amount

3.

Interest Expense

enter a debit amount

enter a credit amount

Interest Payable enter a debit amount

enter a credit amount

4.

Salaries and Wages Expense

enter a debit amount

enter a credit amount

Salaries and Wages Payable enter a debit amount

enter a credit amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Basic Accounting Auditing Concepts Internal Auditing And Guiding

Authors: Bertram Bessette

1st Edition

B09PMFWVSJ, 979-8796265253

More Books

Students also viewed these Accounting questions

Question

Do you think physicians should have unions? Why or why not?

Answered: 1 week ago