Question 2 Partially correct Mark 0.77 out of 1.00 P Flag question Preparing and Journalizing Adjusting Entries For each of the following separate situations, prepare the necessary adjustments (a) using the financial statement effects template and (b) in journal entry form. 1. Unrecorded depreciation on equipment is $2,440. 2. On the date for preparing financial statements, an estimated utilities expense of $1,560 has been incurred, but no utility bill has yet been received or paid. 3. On the first day of the current period, rent for four periods was paid and recorded as a $11,200 debit to Prepaid Rent and a $11,200 credit to Cash. 4. Nine months ago, The Hartford Financial Services Group sold a one-year policy to a customer and recorded the receipt of the premium by debiting Cash for $2,496 and crediting Contract Liabilities for $2,496. No adjusting entries have been prepared during the nine-month period. Hartford's annual financial statements are now being prepared. 5. At the end of the period, employee wages of $3,860 have been incurred but not yet paid or recorded. 6. At the end of the period, $1,200 of interest income has been earned but not yet received or recorded. (a) using the financial statement effects template (b) in journal entry form Financial statements effects template Journal entries Income Statement Cash Asset Noncash Asset 0 Balance Sheet Contra Asset Liabilities 2,440 = Contrib. Capital Earned Capital OX Revenues 0 Expenses 2,440 = Net Income OX 0+ 0 + 0 0 0 0X 0 x = OX Transaction (1) Adjusting entry for depreciation: equipment (2) Adjusting entry for utilities expense (3) Adjusting entry for rent expense (4) Adjusting entry for premium revenues (5) Adjusting entry for wage expense (6) Adjusting entry for interest earned 1,560 0 + 0 + 0 = 0 0 + 0+ 0+ 0 x 0 x OX OX- (1,872) + 3,860 + 0 + 0 x = 0 = 0 x = OX Ox Ox OX 0 + 0 = 0+ 0+ 0X 0 = 0 x OX Check Preparing and Journalizing Adjusting Entries For each of the following separate situations, prepare the necessary adjustments (a) using the financial statement effects template and (b) in journal entry form. 1. Unrecorded depreciation on equipment is $2,440. 2. On the date for preparing financial statements, an estimated utilities expense of $1,560 has been incurred, but no utility bill has yet been received or paid. 3. On the first day of the current period, rent for four periods was paid and recorded as a $11,200 debit to Prepaid Rent and a $11,200 credit to Cash. 4. Nine months ago, The Hartford Financial Services Group sold a one-year policy to a customer and recorded the receipt of the premium by debiting Cash for $2,496 and crediting Contract Liabilities for $2,496. No adjusting entries have been prepared during the nine-month period. Hartford's annual financial statements are now being prepared. 5. At the end of the period, employee wages of $3,860 have been incurred but not yet paid or recorded. 6. At the end of the period, $1,200 of interest income has been earned but not yet received or recorded. (a) using the financial statement effects template (b) in journal entry form Financial statements effects template Journal entries Credit Debit 2,440 O 2,440 1,560 0 1,560 11,200 x 11,200 x General Journal Description (1) Depreciation Expense-Equipment Accumulation Depreciation-Equipment To record depreciation for the period. (2) Utilities Expense Utilities Payable To record accrued utilities expense. (3) Rent Expense Prepaid Rent To record rent expense for the month. (4) Contract Liabilities Premium Revenue To record premium revenue earned. (5) Wages Expense Wages Payable To record accrued wages at the end of the period. (6) Interest Receivable Interest Income To accrue interest earned but not yet received. 1,872 1,872 3,860 3,860 1,200 0 0 1,200
