Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Prepare the Adjusting Journal Entries (AJEs) that should be made on December 31, 2015, the end of the accounting year, for each of the following
- Prepare the Adjusting Journal Entries (AJEs) that should be made on December 31, 2015, the end of the accounting year, for each of the following independent situations. If no AJE is required, indicate none. Assume the firm only makes AJEs at the end of the accounting year. . In addition, identify the impact, if any, on the financial statements if you failed to make the appropriate AJE. Indicate NE for no impact, U for understatement, and O for overstatement. Use the following format to indicate the impact of failing to make the required entry for each situation.
Assets Liabilities Expenses Revenues Net Income Owners Equity
XX XX XX XX XX XX
-
- On April 1, 2015, the firm collected $12,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to a balance sheet account.
-
- On July 1, 2015, the firm collected $12,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to an income statement account.
-
- On March 31, 2015, the firm collected $3,000 of rent for 3 months in advance. The journal entry to record the receipt included a credit to a temporary account.
-
- On February 1, 2015, the firm collected $5,000 of rent for 5 months in advance. The journal entry to record the receipt included a credit to a permanent account.
-
- On March 1, 2015, the firm paid $6,000 for a 6-month insurance policy. The journal entry to record the payment included a debit to a temporary account.
-
- On September 30, 2015, the firm paid $6,000 for a 6-month rental of a machine. The journal entry to record the payment included a debit to a balance sheet account.
-
- On April 1, 2015, the firm paid $6,000 for a 6-month rental of a machine. The journal entry to record the payment included a debit to an income statement account.
-
- On October 31, 2015, the firm paid $5,000 for a 5-month rental of a machine. The journal entry to record the payment included a debit to a permanent account.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started