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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
P9-4 (Static) Recording and Reporting Accrued Liabilities and Deferred Revenue with
Discussion of Accrual versus Cash Accounting LO9-1
[The following information applies to the questions displayed below.]
During its first year of operations, Walnut Company completed the following two transactions. The
annual accounting period ends December 31.
a. Paid and recorded wages of $130,000 during Year 1; however, at the end of Year 1, three days' wages
are unpaid and have not yet been recorded because the weekly payroll will not be paid to
employees until January 6 of Year 2. Wages for the three days are $4,000.
b. Collected rent revenue of $2,400 on December 12 of Year 1 for office space that Walnut rented to
another company. The rent collected was for 30 days from December 12 of Year 1 to January 10 of
Year 2.
P9-4 Part 1
Required:
1. With respect to wages, provide the adjusting entry required at the end of Year 1 and the journal entry required on
January 6 of Year 2.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0efeb5ac-d980-4e93-a264-2f0df2dbe20d%2F33784555-37bf-42f7-89bf-2191095cc80d%2F4h3iwxa_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
P9-4 (Static) Recording and Reporting Accrued Liabilities and Deferred Revenue with
Discussion of Accrual versus Cash Accounting LO9-1
[The following information applies to the questions displayed below.]
During its first year of operations, Walnut Company completed the following two transactions. The
annual accounting period ends December 31.
a. Paid and recorded wages of $130,000 during Year 1; however, at the end of Year 1, three days' wages
are unpaid and have not yet been recorded because the weekly payroll will not be paid to
employees until January 6 of Year 2. Wages for the three days are $4,000.
b. Collected rent revenue of $2,400 on December 12 of Year 1 for office space that Walnut rented to
another company. The rent collected was for 30 days from December 12 of Year 1 to January 10 of
Year 2.
P9-4 Part 1
Required:
1. With respect to wages, provide the adjusting entry required at the end of Year 1 and the journal entry required on
January 6 of Year 2.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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