Accounting: What the Numbers Mean
Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
Question
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Chapter 7, Problem 7.1ME
To determine

Concept Introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

  1. Collecting transactions and events
  2. Recording journal entries for transactions and events
  3. Posting the journal entries into ledgers
  4. Preparing unadjusted trial balance from ledger balances
  5. Recording adjusting entries
  6. Posting adjusting entries into ledgers and Preparing adjusted trial balance
  7. Preparing financial statements; Income statement, balances sheet, statement of owner's equity and Cash flow statements.
  8. Preparing Closing entries to close temporary accounts.
  9. Preparing post closing trial balance
  10. Recording reversing journal entries (Optional)

Requirement-a:

To Prepare:

The Journal entry to record the collection of Rent in Advance

Expert Solution
Check Mark

Answer to Problem 7.1ME

The Journal entry to record the collection of Rent in Advance is as follows:

    DateAccount TitlesDebitCredit
    Dec. 1, 2016
    Cash
    $ 25,800
    Unearned Rent Revenue
    $ 25,800

Explanation of Solution

The Journal entry to record the collection of Rent in Advance is explained as follows:

    DateAccount TitlesDebitCredit
    Dec. 1, 2016
    Cash
    $ 25,800
    Unearned Rent Revenue
    $ 25,800
    (Being Rent received in advance)
To determine

Concept Introduction:

Steps in Accounting cycle: Accounting cycle is the series of steps of accounting process which processes transactions into financial statements. The steps of accounting cycle are as follows:

  1. Collecting transactions and events
  2. Recording journal entries for transactions and events
  3. Posting the journal entries into ledgers
  4. Preparing unadjusted trial balance from ledger balances
  5. Recording adjusting entries
  6. Posting adjusting entries into ledgers and Preparing adjusted trial balance
  7. Preparing financial statements; Income statement, balances sheet, statement of owner's equity and Cash flow statements.
  8. Preparing Closing entries to close temporary accounts.
  9. Preparing post closing trial balance
  10. Recording reversing journal entries (Optional)

Requirement-b:

To Prepare:

The Journal entry to record the adjustment for Rent earned

Expert Solution
Check Mark

Answer to Problem 7.1ME

The Journal entry to record the adjustment for Rent earned is as follows:

    Account TitlesDebitCredit
    Unearned Rent Revenue
    $ 8,600
    Rent Revenue
    $ 8,600

Explanation of Solution

The Journal entry to record the adjustment for Rent earned is explained as follows:

    Account TitlesDebitCredit
    Unearned Rent Revenue
    $ 8,600
    Rent Revenue
    $ 8,600
    (Being adjustment made for accrued Rent revenue) (25800/3)

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