Morton Motor Company faced the following situations. Journalize the adjusting entry needed at December 31, 2012, for

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Morton Motor Company faced the following situations. Journalize the adjusting entry needed at December 31, 2012, for each situation. Consider each fact separately.

a. The business has interest expense of $9,600 that it must pay early in January 2013.

b. Interest revenue of $4,900 has been earned but not yet received.

c. On July 1, when the business collected $12,000 rent in advance, it debited Cash and credited Unearned Rent Revenue. The tenant was paying for two years’ rent.

d. Salary expense is $1,900 per day—Monday through Friday—and the business pays employees each Friday. This year, December 31 falls on a Thursday.

e. The unadjusted balance of the Supplies account is $3,200. The total cost of supplies on hand is $1,400.

f. Equipment was purchased at the beginning of this year at a cost of $80,000. The equipment’s useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment’s book value.


Open the foregoing T-accounts with their beginning balances. Then record the adjustments directly in the accounts, keying each adjustment amount by letter. Show each account’s adjusted balance. Journal entries are not required.

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Related Book For  answer-question

Financial accounting

ISBN: 978-0132751124

9th edition

Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom

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