Chapter 3 Adjusting Accounts for Financial Statements Required sets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year. 2. P 1. Pre pare entries for these transactions under the method that initially records prepaid expenses as as repare entries for these transactions under the method that initially records prepaid expenses as ex d records unearned revenues as revenues. Also prepare adjusting entries at the end of the year Analysis Component 3. Explain why the alternative sets of entries in requirements 1 and 2 do not result in different financial statement amounts. For each of the following journal entries I through 12, enter the letter of the explanation that most closely describes it in the space beside each entry. (You can use letters more than once.) A. To record payment of a prepaid expense. B. To record this period's use of a prepaid expense. G. To record payment of an accrued expense. C. To record this period's depreciation expense. H. To record an accrued revenue. D. To record receipt of unearned revenue. F. To record an accrued expense. I. To record receipt of accrued revenue. E. To record this period's earning of prior unearned revenue. 1. Interest Receivable . . Interest Revenue Cash Accumulated Depreciation 3,500 9,000 8,000 9,000 3,500 9,000 8,000 2. Salaries Payable 4. Cash Chapter 3 Adjusting Accounts for Financial Statements Required sets and records unearned revenues as liabilities. Also prepare adjusting entries at the end of the year. 2. P 1. Pre pare entries for these transactions under the method that initially records prepaid expenses as as repare entries for these transactions under the method that initially records prepaid expenses as ex d records unearned revenues as revenues. Also prepare adjusting entries at the end of the year Analysis Component 3. Explain why the alternative sets of entries in requirements 1 and 2 do not result in different financial statement amounts. For each of the following journal entries I through 12, enter the letter of the explanation that most closely describes it in the space beside each entry. (You can use letters more than once.) A. To record payment of a prepaid expense. B. To record this period's use of a prepaid expense. G. To record payment of an accrued expense. C. To record this period's depreciation expense. H. To record an accrued revenue. D. To record receipt of unearned revenue. F. To record an accrued expense. I. To record receipt of accrued revenue. E. To record this period's earning of prior unearned revenue. 1. Interest Receivable . . Interest Revenue Cash Accumulated Depreciation 3,500 9,000 8,000 9,000 3,500 9,000 8,000 2. Salaries Payable 4. Cash