Exercise 39

Journalize the adjusting entry needed at December 31 for each of the following independent situations:

a. On June 1, when we collected $48,000 rent in advance, we debited Cash and credited Unearned Rent Revenue. The tenant was paying for one years rent in advance. At December 31, we must account for the amount of rent we have earned.

b. Interest revenue of $2,400 has been earned but not yet received on a $60,000 note receiv- able held by the business.

c. Salaries expense is $7,500 per dayMonday through Fridayand the business pays employees each Friday. This year December 31 falls on a Wednesday.

d. Equipment was purchased last year at a cost of $200,000. The equipments useful life is five years. It will have no value after five years. Record the years amortization.

e. On September 1, when we paid $6,000 for a one-year insurance policy, we debited Prepaid Insurance and credited Cash.

f. The business owes interest expense of $7,200 that it will pay early in the next period.

g. The unadjusted balance of the Supplies account is $13,500. The total cost of supplies remaining on hand on December 31 is $4,500.