Example of apportioning an expense settled in the subsequent period ( no reversing entries)

• Adjusting entry - prior period

General Journal
Jun 30	Salaries Expense	3 980	3 980
	Salaries Payable
	(Adjusting entry for salaries payable)

• Subsequent Entry current period

Jul 6	Salaries Payable (Last years accrual)	3 980	7 400
	Salaries Expense (This years expense)	3 420
	Cash at Bank
	(Payment of salaries earned 23 June to 6 July)

Example with a reversal entry

Adjusting entry - prior period

General Journal
Jun 30	Salaries Expense	3 980	3 980
	Salaries Payable
	(Adjusting entry for salaries payable)

Reversal entry current period: First day 1 July

Jul 1	Salaries Payable	3 980	3 980
	Salaries Expense
	(Reversing entry for salaries payable)

Examples of Reversing entries

7400 Subsequent Entry Jul 6 Salaries Expense Cash at Bank (Payment of salaries earned 23 June to 6 July) 7 400 Correct expense recorded in prior period, and closec 3.980 $3980 Salaries Expense Prior period Adjusting Entry Closing Entry Expense prior period 3 980 0 Subsequent Entry 7400 Reversing Entry Expense for the current period 3420 Correct expense $3420 recorded in current period 3 980 without needing to know what had been accrued previously KAPLAN USINESS SCHOOL K. Class Discussion On 30 June 2020, the adjusted trial balance of Outback Car Rentals showed the following selected balances: Rental revenue Interest expense Rentals receivable Interest payable $ 740 000 17 000 42 000 8 200 Both the Rentals Receivable and Interest Payable accounts had been recorded as a result of adjusting entries made on 30 June. KAPLAN USTALIA SCHOOL K Class Discussion Required (a) Prepare the adjusting entries that would have been recorded on 30 June for both items. (b) Prepare any necessary reversing entries that would be made on 1 July. (c) Prepare the entries on 10 July assuming that cash of $36 000 had been received on the outstanding rentals and $9000 was paid in interest. (d) Assuming that any reversing entries in B were not made, what entries would be made on 10 July for the cash receipt and cash payment