Question

Each of the following independent events requires a year-end adjusting entry. Paid $9,400 cash in advance on July 1 for a one-year lease on office space. Purchased $3,300 of supplies on account on April 15. At year-end, $310 of supplies remained on hand. Received a $8,600 cash advance on July 1 for a contract to provide services for one year beginning immediately. Paid $3,800 cash in advance on February 1 for a one-year insurance policy. Required Record each event and the related adjusting entry in general journal format. The first event is recorded as an example. Assume a December 31 closing date. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Date Account Titles Debit Credit July 1 Prepaid rent 9,400 Cash 9,400 Dec. 31 Rent Expense (9,400 × 6/12) 4,700 Prepaid rent 4,700

Record supplies purchase on account.

Record adjusting entry for supplies expenses.

Record cash received in advance for services to be provided.

Record adjusting entry for unearned revenue.

Record cash paid in advance for a one-year insurance policy.

Record adjusting entry for prepaid insurance.

Answer 1

Journal

Date	Account Title and Explanation	Debit	Credit
Apr 5	Supplies	3,300
	Accounts payable		3,300
	(To record purchase of supplies on accounts)
Dec 31	Supplies expense	2,990
	Supplies		2,990
	(To record supply expense
July 1	Cash	8,600
	Unearned service revenue		8,600
	(To record unearned service revenue)
Dec 31	Unearned service revenue	4,300
	Service revenue		4,300
	(To record service revenue earned)
Feb 1	Prepaid insurance	3,800
	Cash		3,800
	(To record prepaid insurance)
Dec 31	Insurance expense	3,483
	Prepaid insurance		3,483
	(To record insurance expense)

Supplies expense = Supplies purchased - Ending supplies

= 3,300 - 310

= $2,990

Service revenue for 1 year received on July 1 = $8,600

Hence, service revenue for 6 month (From July to Dec) = 8,600 x 6/12

= $4,300

Insurance expense paid for 1 year on Feb 1 = $3,800

Hence, Insurance expense for 11 months (From Feb to Dec) = 3,800 x 11/12

= $3,483