Gunther recorded the following transactions and year-end adjustments during 2012:

Requirements
1. Assuming that there were no other service revenue and rent expense transactions during 2012, journalize Gunther€™s closing entries at the end of 2012.
2. Open T-accounts for Service revenue and Rent expense. Post the closing entries to these accounts. What are their balances afterclosing?

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Journal Entry Accounts and Explanations Debit Credit Prepaid rent Cash 8,000 8,000 Prepaid the annual rent. Rent expense 5,100 Prepaid rent Adjustment to record rent expense for the year. 5,100 Cash 4,200 Unearned service revenue 4,200 Collected cash in advance of service revenue to be earned. Unearned service revenue 4,700 Service revenue 4,700 Adjustment to record revenue earned.