Question
The unadjusted trial balance for a company as of December 31, 2015 appears below. Debit Credit Cash $1,200 Accounts Receivable 900 Prepaid Insurance 900 Supplies
The unadjusted trial balance for a company as of December 31, 2015 appears below.
Debit | Credit | |
Cash | $1,200 | |
Accounts Receivable | 900 | |
Prepaid Insurance | 900 | |
Supplies | 2,000 | |
Land | 10,000 | |
Office Furniture | 4,500 | |
Accounts Payable | 900 | |
Unearned Revenue | 1,500 | |
Note Payable | 5,500 | |
Common Stock | 3,000 | |
Retained Earnings | 7,400 | |
Dividends | 1,100 | |
Service Revenues | 4,100 | |
Rent Expense | 600 | |
Salaries Expense | 1,200 | |
$22,400 | $22,400 |
Additional Information:
1. The Company paid $900 for a one-year insurance policy on July 1, 2015.
2. The office furniture was purchased on January 1, 2015 and is expected to have a nine-year life and no salvage. Depreciation for 2015 has not been recorded.
3. The unearned revenue account was created when the Company was paid $1,500 for services to be rendered. Half of these services were rendered on December 31, 2015.
4. The note payable represents a 8 month, 8% loan obtained from The Bank & Trust on October 1, 2015.
5. The Company paid $600 on November 1, 2015 as annual rent for its warehouse. This amount was debited to rent expense.
6. The Company operates five days per week (M-F) with a weekly payroll of $500. The Company pays its employees every Friday. December 31, 2015 is a Wednesday. These wages have yet to be recorded.
7. Supplies on hand at December 31, 2015 had a cost of $600.
Using the information from above...
Part A: The correct adjusting entry for number 5 would be
A. | Debit to Prepaid Rent for $500 | |
B. | Debit to Rent Expense for $500 | |
C. | Credit to Rent Expense for $100 | |
D. | Debit to Prepaid Rent for $100
Please select the correct letter choice |
Part B: The correct adjusting entry for number 4 above includes a
A. | Credit to Interest Expense for $110 | |
B. | Debit to Interest Expense for $110 | |
C. | Debit to Interest Payable for $110 | |
D. | Credit to Interest Payable for $290 Please select the correct letter choice. |
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