Question

involue cas at leerd original of the period Transactions/Adjusting Entries - due 02/03 19 Crane Department Store had the following information available at December 31, 2019. A) A 10%, $3,000 note payable was issued March 1, 2019. Under the terms of the note, the amount of the note plus interest is to be paid on February 29, 2020. Crane rents space to the Eric Co. for Gourmet Foods. On December 1, 2019, Eric Co. had prepaid rent for December 2019, January 2020, and February 2020. The entire amount was recorded as unearned income (by Crane) when it was received. The total rent for three months was $3,000. On November 1, 2019, Crane purchased a two-year insurance policy for $4,800. The entire amount had been recorded as insurance expense. Supplies costing $4,000 were purchased on January 1, 2019. The supplies were recorded as assets, supplies, when purchased. A year-end count of the supplies revealed that only $200 of supplies were still unused and remained in stock. Eileen's Heavenly Coffee rents part of the store (from Crane) for $800 per month. Eileen has not paid rent for the month of December 2019 and rent revenue has not yet been recorded.

Answer 1

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Naming convention and fromat is not available, can be slightly different: Solution: Credit Date A) Dec.31 2019 Debit 250 $ $ 250 $ 1,000 B) Dec.31 2019 $ 1,000 Journal entries Account title and explaination Interest Expense (3000*10%)/12*10 Interest Payable (To record the accrual of interet expense) Unearned Income (3000/3) Rent Revenue (To recognize the rent revenue) Prepaid Insurance (4800/12)*10 Insurance expense (To record the prepaid insurance expense) Supplies Expense (4000-200) Supplies (To record the supplies expense) Accounts Receivable - (Eileen's) Rent Revenue (To record the accrual of rent revenue) $ C) Dec.31 2019 4,000 $ 4,000 $ 3,800 D) Dec.31 2019 $ 3,800 $ 800 E) Dec.31 2019 $ 800