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In: Accounting

During June, Bravo Magazine sold for cash six advertising spaces for $400 each to be run...

During June, Bravo Magazine sold for cash six advertising spaces for $400 each to be run in the July through December issues. On that date, Bravo properly recognized Unearned Revenue. The adjusting entry to record on July 31 includes:

a. a debit to unearned revenue of $400

b. a debit to cash for $2000

c. credit to revevue for $2000

d. credit to unearned revenue for $400

On January 1, 20X1, Bravo Company borrowed $24,000 to purchase equipment. The loan is to be repaid plus interest of 10% per year, on December 31, 20X2. Prepared the general journal adjusting entry (without explanation) needed for December 31, 20X1.

Solutions

Expert Solution

a) Adjusting entry

Date account and explanation debit Credit
Unearned revenue 400
Revenue earned 400

So answer is a) A debit to unearned revenue of $400

b) Adjusting entry

Date account and explanation debit Credit
Dec 31,20X1 Interest expense (24000*10%) 2400
Interest payable 2400

ekkarill92 answered 2 years ago
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