Question

Problem 6-10 You started the year with a beginning balance in Rent Payable of $1,000. You paid 14 months' rent of $14,000. Record the journal entry. Problem 6-11 You started the year with a beginning balance in Prepaid Rent of $4,000. You paid 9 months of rent of $18,000. Record the journal entry. Problem 6-12 You started the year with $5,000 in Wages Payable. You paid $50,000 to your worker. You owed her $10,000 at the end of the year. Record the journal entries.

Answer 1

1.

Beginning rent payable = $ 1,000

14 months rent balance = $ 14,000

This means that rent for each month is 14000/14 = $ 1000 per month. Current payment therefore includes rent payable of previous year to $ 1000, current year rent of $ 12000 and prepaid rent of $ 1000.

Date	Particulars	Debit ($)	Credit ($)
	Rent Payable	1,000
	Rent expense	12,000
	Prepaid/advance rent	1,000
	Cash		14,000
	( To adjust rent for year)

2.

9 months rent = $ 18000

That means monthly rent would be $18,000/9 = $ 2,000

This means that 12 months rent would be $ 24,000. The advance rent at opening would be adjusted against this leaving balance of 24,000 – 4000= 20,000. This balance would be cash for rent accrued in the year. The rent falls short of annual 20,000 by $ 2,000 still. So, rent payable would be $ 2000

Date	Particulars	Debit ($)	Credit ($)
	Rent expense	24,000
	Cash		18,000
	Prepaid rent		4,000
	Rent payable		2,000
	( To adjust rent for the year)

3.

The wages for the year would be = 50,000 – 5000 + 10000 = 55,000

Date	Particulars	Debit ($)	Credit ($)
	Wages expense	55,000
	Cash		50,000
	Wages payable		5,000
	(To record wages for the year)

The current year payable would be added to opening balance = 10,000 - 5000 + 5000 = $10000 which will be balance of wages payable at end as per question