Question

Boland, Inc. has prepared a year-end December 31, 2019 unadjusted trial balance. Certain accounts in the trial balance do not reflect all intemal transactions that have occurred. Additional information affecting Boland's account balances follow: 1. On July 31, 2019, a six-month, 12% note for $40,000 was received from a customer in lieu of a cash payment. Interest and principal are due to Boland on 1/31/20. 2. On October 1, 2019, $36,000 was collected from a tenant as rent for one year and recorded as Deferred Rent Revenue. 3. A two-year insurance policy was acquired and paid for on May 31, 2019 for $4,800 and recorded as Prepaid Insurance. 4. Employees were paid their weekly payroll on Friday, December 27, 2019 for work performed through that date. The next payroll date will be January 3, 2020. Employees are paid $4,000 per day, Monday thru Friday. Required: Prepare ADJUSTING joumal entries at 12/31/19 related to the additional items presented above.

Answer 1

(Adjusted Accounting entries on Dec 31 2019)
Accounting of Interest
Customer Account	Dr	2000
Accrued Interest	Cr	2000
Accounting of Note
Promissory Note	Dr	40000
Customer Account	Cr	40000
Accounting of Rent Receipt
Bank Account	Dr	36000
Customer Account	Cr	36000
Accounting of Prepaid Rent
Customer Account	Dr	36000
Deferred Rent revenue	Cr	36000
Accounting of Rent income
Deferred Rent revenue	Dr	9000
Rent	Cr	9000
Accounting of Insurance Payment
Vendor Account	Dr	4800
Bank	Cr	4800
Accounting of Prepaid Insurance
Prepaid Insurance	Dr	4800
Vendor Account	Cr	4800
Accounting of Insurance Expense
Deferred Rent revenue	Dr	1400
Rent	Cr	1400
Accrued Salary
Salary Account	Dr	8000
Salary Payable Account	Cr	8000
(Assuming there is no payment for weekends, hence calculated for 2 working days of Dec 2019)