Adjusting entries for prepaid insurance, unearned revenue and prepaid rent and ledger accounts

Non-GST version

Monthly Craft Magazines ledger includes the following accounts: Subscriptions revenue, Unearned subscriptions revenue, Prepaid insurance, Insurance expense, Prepaid rent and Rent expense.

The following transactions relating to subscriptions, insurance and rent occurred on the dates indicated. Ignore GST.

Subscriptions

• 1 July 2022. The 'Unearned subscriptions revenue' account contained a credit balance of $77,500. Of this balance, $21,900 is for subscriptions expiring at the end of October and $55,600 is for subscriptions expiring at the end of February.
• 1 November 2022. Monthly Craft Magazine received $18,000 for subscriptions lasting 6 months.
• 1 March 2023. Monthly Craft Magazine received $36,000 for subscriptions lasting 12 months.
• 1 May 2023. Monthly Craft Magazine received $16,000 for subscriptions lasting 6 months.

Insurance

• 1 July 2022. The 'Prepaid insurance' account contained a debit balance of $11,970 for a policy that ends on 31 March.
• 15 September 2022. Monthly Craft Magazine paid $30,000 for a 12-month policy beginning coverage on 15 September.

Rent

• 1 July 2022. The 'Prepaid rent' account contained a debit balance of $12,995 for the period July to November inclusive.
• 1 December 2022. Monthly Craft Magazine paid $24,000 for 9 months rent.

Required

(a) Record the necessary adjusting entry at 30 June 2023 (the end of the financial year).

Please remember to include your rounded final answers in the relevant T-account below in part (b) of this question as well.

MONTHLY CRAFT MAGAZINE
General Journal
Date	Particulars		Debit	Credit
	Adjusting entries
30 June 2023		Unearned subscriptions revenue
		Subscriptions revenue
		(Subscriptions revenue earned)
30 June 2023		Insurance expense
		Prepaid insurance
		(Expired insurance)
30 June 2023		Rent expense
		Prepaid rent
		(Rental costs expired)

(b) For each of the transactions listed above in this question, enter the beginning balance amount in the relevant T-account and post the amounts from the transactions directly to the relevant T-accounts. Then post the amounts from the adjusting entries from part (a) to the relevant T-accounts.

Subscriptions revenue
			30/06/2023	Unearned subscriptions revenue

Unearned subscriptions revenue
30/06/2023	Subscriptions revenue		1/07/2022	Balance b/d
30/06/2023	Balance c/d		1/11/2022	Cash at bank
			1/03/2023	Cash at bank
			1/05/2023	Cash at bank
			1/07/2023	Balance b/d

Prepaid insurance
1/07/2022	Balance b/d		30/06/2023	Insurance expense
15/09/2022	Cash at bank		30/06/2023	Balance c/d
1/07/2023	Balance b/d

Insurance expense
30/06/2023	Prepaid insurance

Prepaid rent
1/07/2022	Balance b/d		30/06/2023	Rent expense
1/12/2022	Cash at bank		30/06/2023	Balance c/d
1/07/2023	Balance b/d

Rent expense
30/06/2023	Prepaid rent