Problem - 3 (20 marks)

WXB Inc. is preparing its financial statements for 2019. Data related to the balances of various accounts affected by the adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Please consider each question separately and independently. (20 marks)

1.WXB Inc. rented out a building for 2 years to Joto Inc. The rent for the building is $4000 per month. The total rental price for the 2 years is $96,000. Joto Inc. paid the total price $96,000 on 1 Jan. 2018. You are to prepare the missing adjusting entry. (3 marks)

2.The interest receivable on 1 January 2019 was $2,000. The notes receivable has a balance of$1,000,000 at the beginning of the year. There is no change in notes receivable for the year 2019. The interest rate for the notes receivable is 5% (unpaid by the debtor as of the end of 2019). You are to provide the missing adjusting entry that needs to be made. (3 marks)

3.Accumulated depreciationequipment on 1 January 2019 was $460,000. On 31 December 2019, the balance of the account was $540,000. During 2019, one piece of equipment was sold. The equipment had an original cost of 120,000 and was 3/4 depreciated when sold. You are to prepare the missing adjusting entry. (3 marks)

4.WXB leased a piece of equipment for 3 years at the beginning of 2018. The leasing price for the equipment is $5,000 per month. WXB paid $180,000 for the 3-year on 1 Jan. 2018. You are to prepare the missing adjusting entry related to the prepaid rent for 2019. (3 marks)

5.Revenue for 2019 is $300,000 and total expense is $200,000. Net income for the year was $100,000 (assuming no tax). During 2019, total dividends of $160,000 were declared and $120,000 were paid in cash. Please prepare the closing journal entries for the revenue, expense, and dividend accounts. (8 marks)