Question

66.

1. On September 1, 2004, Merit Company paid the landlord $4,800 for one year's rent in advance. A temporary account was debited. The adjusting entry at December 31, 2004 would include a:

   		debit to Prepaid Rent
   		credit to Prepaid Rent
   		debit to Rent Payable
   		debit to Rent Expense
   		none of the above

67.

1. Refer to the above question. The amount of the adjusting journal entry at December 31, 2004 would be:

   		$ 4,800
   		$ 3,200
   		$ 400
   		$ 1,600
   		none of the above

68.

On October 1, 2004, Merit received $7,000 in advance for fees to be earned evenly over seven months beginning on that date. A temporary account was credited. The required adjusting journal entry at December 31, 2004 would include a:

		debit to Cash
		credit to Unearned Fee Revenue
		credit to Cash
		credit to Fee Revenue
		none of the above

Answer 1

66) Adjusting entry

Date	account and explanation	Debit	Credit
	Rent expense	XXX
	Prepaid rent		XXX

So answer is b) credit to Prepaid Rent

67) Amount = 4800/12*4 = 1600

So answer is d) $1600

68) Adjusting entry

Date	account and explanation	debit	Credit
	Fees revenue	XXX
	Unearned Fees revenue		XXX

So answer is b) credit to Unearned Fee Revenue