Explanation Adjusting entries : Adjusting entries are the journal entries which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting. a. Collected rent for the period of October to December which was credited to unearned revenue on October 1. Unearned revenue is a liability. There is a decrease in liability. Hence, debit unearned revenue with $800. Rent revenue is a revenue account which is a component of stockholders’ equity. There is an increase in the revenue account which increases the stockholders’ equity. Hence, credit service revenue account with $800. Working note: Calculate the amount of rent revenue: Rent revenue=Amount collected× 1 3 = ( $2,400× 1 3 ) =$800 b. Insurance premium paid for a two years on October 1 and debited premium insurance for that amount. Insurance expense is an expense account which is a component of stockholders’ equity. There is an increase in expense which decreases the stockholders’ equity. Hence, debit insurance expense with $50. Prepaid insurance is an asset. There is a decrease in asset. Hence, credit prepaid insurance account with $50

Loose-leaf for Fundamentals of Financial Accounting with Connect

5th Edition

ISBN: 9781259619007

Author: Fred Phillips Associate Professor

Publisher: McGraw-Hill Education

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 4, Problem 4.6ME

To determine

To record: The adjusting journal entries required on October 31.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 4, Problem 4.5ME

Chapter 4, Problem 4.7ME

Students have asked these similar questions

Can you help me with Financial accounting question?

Hello tutor please given General accounting question answer do fast and properly explain all answer

Madison Industries uses the FIFO (first-in, first-out) method in its process costing system. The mixing department had $4,800 in material cost in its beginning work in process inventory, and $68,000 in material cost was added during the period. The equivalent units of production for materials during the period were 17,000 units. What is the cost per equivalent unit for materials?

Chapter 4 Solutions

Loose-leaf for Fundamentals of Financial Accounting with Connect

Ch. 4 - Prob. 1Q Ch. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...

Ch. 4 - What is the equation for each of the following...Ch. 4 - Prob. 12Q Ch. 4 - What is the purpose of closing journal entries?Ch. 4 - Prob. 14Q Ch. 4 - Prob. 15Q Ch. 4 - What is a post-closing trial balance? Is it a...Ch. 4 - The owner of a local business complains that the...Ch. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - When a concert promotions company collects cash...Ch. 4 - On December 31, an adjustments made to reduce...Ch. 4 - An adjusting journal entry to recognize accrued...Ch. 4 - Prob. 6MC Ch. 4 - Company A has owned a building for several years....Ch. 4 - Which of the following trial balances is used as a...Ch. 4 - Assume the balance in Prepaid Insurance is 2,500...Ch. 4 - Assume a company receives a bill for 10,000 for...Ch. 4 - Understanding Concepts Related to Adjustments...Ch. 4 - Understanding Concepts Related to Adjustments...Ch. 4 - Matching Transactions with Type of Adjustment...Ch. 4 - Recording Adjusting Journal Entries Using the...Ch. 4 - Determine Accounting Equation Effects of Deferral...Ch. 4 - Prob. 4.6ME Ch. 4 - Determining Accounting Equation Effects of Accrual...Ch. 4 - Recording Adjusting Journal Entries Using be...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral and Accrual...Ch. 4 - Reporting Adjusted Account Balances Indicate...Ch. 4 - Preparing an Adjusted Trial Balance Macro Company...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Reporting a Balance Sheet Refer to M4-14. Prepare...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Prob. 4.20ME Ch. 4 - Prob. 4.21ME Ch. 4 - Prob. 4.22ME Ch. 4 - Prob. 4.23ME Ch. 4 - Prob. 4.24ME Ch. 4 - Prob. 4.25ME Ch. 4 - Prob. 4.26ME Ch. 4 - Posting AJEs and Preparing an Adjusted Trial...Ch. 4 - Identifying Adjustments and Preparing Financial...Ch. 4 - Prob. 4.3E Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Prob. 4.6E Ch. 4 - Prob. 4.7E Ch. 4 - Prob. 4.8E Ch. 4 - Prob. 4.9E Ch. 4 - Inferring Transactions from Accrual and Deferral...Ch. 4 - Reporting Depreciation The adjusted trial balance...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Prob. 4.13E Ch. 4 - Prob. 4.14E Ch. 4 - Recording Adjusting Entries and Preparing an...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Prob. 4.18E Ch. 4 - Prob. 4.19E Ch. 4 - Prob. 4.1CP Ch. 4 - Prob. 4.2CP Ch. 4 - Prob. 4.3CP Ch. 4 - identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Prob. 4.2PA Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Prob. 4.4PA Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Recording Adjusting Journal Entries Cactus...Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Prob. 4.4PB Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 4.2COP Ch. 4 - Prob. 4.3COP Ch. 4 - Prob. 4.4COP Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 4.6COP Ch. 4 - Finding Financial Information Refer to the...Ch. 4 - Prob. 4.2SDC Ch. 4 - Ethical Decision Making: A Mini-Case Assume you...Ch. 4 - Adjusting the Accounting Records Assume it is now...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

To record: The adjusting journal entries required on October 31.

Solution Summary: The author explains how adjusting entries are recorded at the end of the accounting period to correct or adjust revenue and expense accounts, to concede with the accrual principle of accounting.

Concept explainers

Videos

To record: The adjusting journal entries required on October 31.

Want to see the full answer?

Chapter 4 Solutions