For each of the following situations, provide the necessary adjusting entries for Landis Inc. for the year ended December 31, 2016.
(These situations are tricky. When preparing each adjusting entry, compare what is recorded in the accounting system before you make your entry with what you think should be in the accounting system. Your adjusting entry should take the accounting system from "what is" recorded to "what should be" recorded.)
a. On April 1, 2016, Landis Inc. paid $25,000 cash for the right to use a vacant lot to store some of its equipment for the next two years. The transactional journal entry debited prepaid rent for $25,000 and credited cash for $25,000.
b. On November 1, 2016, Landis Inc. received $10,000 as an advance for services to be rendered in 2017. Landis Inc. recorded the transaction by debiting cash for $10,000 and crediting revenue for $10,000.
c. On July 2, 2016, Landis Inc. purchased equipment with a five-year life for $50,000. Landis Inc. debited equipment expense and credited cash to record the transaction.

  • CreatedFebruary 26, 2015
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