Question

10501122 X 10501118 X 31050111 10501125 10 x Adjusting Entries Written Homework.docx - Locked • Regular 12 Times 17 12 On January 1, 2020 the company paid $3,600 for an annual (12 month) flood insurance policy covering their headquarter building. Assume the company has a monthly accounting period, prepare the adjusting entry needed at the end of January Assume the company has a quarterly accounting period (report once every 3 months). Prepare the entry needed at the end of the first quarter. A business pays its employees $1,500 per day and payday is each Friday. Prepare the adjusting entry needed if the end of the accounting period falls on Monday. Prepare the adjusting entry needed if the end of the accounting period falls on Thursday. ha - On October 1, a tenant pays their landlord $2,500 for five moths rent. Prepare the entry needed on October 1st to record this transaction Prepare the adjusting entry needed on October 31 Prepare the entry needed on October 1st if you are the Landlord Prepare the adjusting entry needed on October 31st if you are the Landlord. TUESDAY session students: This is due no later than 11:59 pm on THURSDAY session students: This is due no later than 11:59 pm Chapter 3 Powerpoint

Answer 1

1)(A)

If the company has a monthly accounting period the adjustment entry for insureance will be-

Prepaid Insurance Account...................................Debit $3300

To Insurance Account $3300

( Being insureance paid in advance for 11 months is adjusted)

Note: Advance Insureance for 11 months = $3600 x 11/12 = $3300

(B)

If the company has a quarterly accounting period the adjustment entry will be-

Prepaid Insurance Account...................................Debit $2700

To Insurance Account $2700

(Being insureance paid in advance for 3 quarters is adjusted)

Note : advance insureance for 3 quarters = $3600 x 3/4

2)(A)

If the end of the accounting period falls on monday then adjustment entry will be-

Salary Account.......................................................Debit $4500

To Salary Payble $4500

(Being salary payble form satday to monday is adjusted)

Note: the pay day for the salary is friday. so, from saturday to monday salary is outstanding which is (1500x3) = $4500.

(B)

If the end of the accounting period is thursday then adjustment entry will be-

Salary Account.......................................................Debit $9000

To Salary Payble Account $9000

(being salary payble from saturday to thursday is adjusted)

Note: Salary is outstanding for 6 days i.e from saturday to thursday

3)

In the books of tennat

(A)

On 1^st October

Cash Account .......................................................Debit $2500

To Rent Account $2500

(Being rent paid)

(B)

On 31^st October   

Prepaid Rent Account............................................Debit $2000

To Rent Account $2000

(Being advance rent adjusted of 4 months)

Note: Advance Rent of 4 Months from november to february = $2500 x 4/5 = $2000

In the books of landlord

(C)

October, 1^st

Cash Account.....................................................................Debit $2500

To Rent Income Account $2500

(Being rent received for 5 months)

(D)

October 31^st

Rent Income Account..........................................................Debit $2000

To Advance Rent Received Account $2000

(Being advance rent received for 4 months is adjusted)