The accountant for Save More Company made the following adjusting entries on December 31, 2011. Further information
Question:
Further information is provided as follows:
(a) Annual rent is paid in advance every October 1.
(b) Advertising materials are purchased at one time (June 1) and are used evenly throughout the year.
(c) Annual rent is received in advance every March 1.
(d) Office supplies are purchased every July 1 and used evenly throughout the year.
(e) Yearly insurance premium is payable each August 1.
Instructions:
For each adjusting entry, indicate the original transaction entry that wasrecorded.
(a) Prepaid Rent 1,800 Advertising Expense.. Unearned Revenue -... Office Supplies Expense . Insurance Expense 1,800 1,700 900 1,000 1,050 900 (c) Rent Revenue (d) Office Supplies (e) Prepaid Insurance .. .
Step by Step Answer:
2011 a Oct 1 Rent Expense 2400 Cash 2400 1800 912 2400 annual expense b June 1 Ad...View the full answer
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Related Video
Unearned revenue is money received by an individual or company for a service or product that has yet to be provided or delivered. It can be thought of as a \"prepayment\" for goods or services that a person or company is expected to supply to the purchaser at a later date. As a result of this prepayment, the seller has a liability equal to the revenue earned until the good or service is delivered. This liability is noted under current liabilities, as it is expected to be settled within a year.
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