Caste Sales and Service completed the following transactions during 2023.

Aug. 31	Paid $10,500 store rent covering the six-month period ending February 29, 2024.
Dec. 1	Collected $6,400 cash in advance from customers. The service revenue earned will be $1,600 each month over the four-month period ending March 31, 2024.

Required

1.	Journalize these entries by debiting an asset account for Prepaid Rent and by crediting a liability account for Unearned Service Revenue. Explanations are not required.
2.	Journalize the related adjustments at December 31, 2023. Explanations are not required.
3.	Post the entries to the T-accounts, and show their balances at December 31, 2023.
4.	Repeat requirements 1 through 3. This time, debit Rent Expense for the rent payment and credit Service Revenue for the collection of revenue in advance.
5.	Compare the account balances in requirements 3 and 4.

Requirement 1. Journalize these entries by debiting an asset account for Prepaid Rent and by crediting a liability account for Unearned Service Revenue. Explanations are not required. (Record debits first, then credits.)

Begin by recording the August 31 entry by debiting an asset account for Prepaid Rent.

	Journal Entry
Date	Accounts	Debit	Credit

Part 2

Record the December 1 entry by crediting a liability account for Unearned Service Revenue.

	Journal Entry
Date	Accounts	Debit	Credit

Part 3

Requirement 2. Journalize the related adjustments at December 31,

2023.

Explanations are not required. (Record debits first, then credits.)

Journalize the adjustment related to the Prepaid Rent account at December 31,

2023.

Journal Entry

Date

Accounts

Debit

Credit

Part 4

Journalize the adjustment related to the Unearned Service Revenue at December 31,

2023.

Journal Entry

Date

Accounts

Debit

Credit

Requirement 3. Post the entries to the T-accounts, and show their balances at December 31,

2023.

(Use the first available cell in each account. If a box is not used in the T-accounts, leave the box empty; do not enter "0." The beginning balances have been entered for you.)

Prepaid Rent

Unearned Service Revenue

Bal.

0

Bal.

0

Service Revenue

Rent Expense

Bal.

0

Bal.

0

Requirement 4. Repeat requirements 1 through 3. This time, debit Rent Expense for the rent payment and credit Service Revenue for the collection of revenue in advance.

Record the August 31 entry. This time, debit Rent Expense instead of Prepaid Rent. (Record debits first, then credits. Explanations are not required.)

Journal Entry

Date

Accounts

Debit

Credit

Aug. 31

Rent Expense

Cash

Part 7

Record the December 1 entry. This time, credit Service Revenue instead of Unearned Service Revenue.

Journal Entry

Date

Accounts

Debit

Credit

Dec. 1

Cash

Service Revenue

Part 8

Journalize the adjustment related to the Rent Expense account at December 31,

2023.

Journal Entry

Date

Accounts

Debit

Credit

Dec. 31

Prepaid Rent

Rent Expense

Part 9

Journalize the adjustment related to the Service Revenue at December 31,

2023.

Journal Entry

Date

Accounts

Debit

Credit

Dec. 31

Service Revenue

Unearned Service Revenue

Post the December 31 adjusting entries to the T-accounts, and calculate the account balances. (Use the first available cell in each account. If a box is not used in the T-accounts, leave the box empty; do not enter "0." The beginning balances have been entered for you.)

Prepaid Rent

Unearned Service Revenue

Bal.

0

Bal.

0

Service Revenue

Rent Expense

Bal.

0

Bal.

0

Part 11

Requirement 5.Compare the account balances in requirements 3 and 4.

The T-account ending balances calculated under requirement 3 are ________________the T-account balances calculated in requirement 4. a. equal to b. greater than c. less than d. switched compared to