Check photo **Part 1: Instructions and Adjustments for Journal Entries****Directions:** Prepare general journal entries on December 31 to record the following year-end adjustments.**a.** Estimated depreciation on office equipment for the year: $4,000.**b.** The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of insurance policies shows $950 of insurance expired.**c.** The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees worked full days on Monday, Tuesday, and Wednesday, December 26, 29, 30, and 31.**d.** On November 1, the company received 6 months’ rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account.**e.** The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for December.

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Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.6E: Prepaid Rentâ€”Quarterly Adjustments On September 1, Northhampton Industries signed a six-month...

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**Part 1: Instructions and Adjustments for Journal Entries**

**Directions:** Prepare general journal entries on December 31 to record the following year-end adjustments.

**a.** Estimated depreciation on office equipment for the year: $4,000.

**b.** The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of insurance policies shows $950 of insurance expired.

**c.** The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees worked full days on Monday, Tuesday, and Wednesday, December 26, 29, 30, and 31.

**d.** On November 1, the company received 6 months’ rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account.

**e.** The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for December.

Expert Solution

Step 1

Journal entry:

Journal entry is the book of original entry where first transactions are recorded in the books of account. In the accounting cycle, the first step an accountant or a bookkeeper follows is the journal entry. It consists of a debit side and credit side balances. Both debit side balance and credit side balance should be matched.

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