Financial Accounting
Financial Accounting
3rd Edition
ISBN: 9780078025549
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
bartleby

Videos

Question
Book Icon
Chapter 3, Problem 3.13E

(a)

To determine

To record: The adjusting entry for interest revenue recognized at the end of the accounting year.

(a)

Expert Solution
Check Mark

Answer to Problem 3.13E

Adjusting entry for service revenue is as follows:

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Interest receivable 270
Interest revenue 270
(To record the interest revenue recognized at the end of the accounting year)

Table (4)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Interest receivable is an assets account. There is an increase in assets, therefore it is debited.
  • Interest revenue is revenue, and it increased the value of stockholder’s equity. Therefore, it is credited

(b)

To determine

To record: The adjusting entry for prepaid rent.

(b)

Expert Solution
Check Mark

Answer to Problem 3.13E

Adjusting entry for prepaid rent is as follows:

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Rent expense 3,000
Prepaid rent 3,00
(To record the rent expense incurred at the end of the accounting year)

Table (2)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Rent expense is an expense, and it decreased the value of stockholder’s equity. Therefore, it is debited.
  • Prepaid rent is an asset account. There is a decrease in assets, therefore it is credited.

(c)

To determine

To record: The adjusting entry for service revenue recognized at the end of the accounting year.

(c)

Expert Solution
Check Mark

Answer to Problem 3.13E

Adjusting entry for service revenue is as follows:

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Unearned revenue 5,500
Service revenue 5,500
(To record the service revenue recognized at the end of the accounting year)

Table (4)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Unearned revenue is a liability account. There is a decrease in liability, therefore it is debited.
  • Service revenue is revenue, and it increased the value of stockholder’s equity. Therefore, it is credited

(d)

To determine

To record: The adjusting entry for depreciation expense on December 31, 2018.

(d)

Expert Solution
Check Mark

Answer to Problem 3.13E

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Depreciation Expense 5,500
Accumulated Depreciation 5,500
(To record the amount of depreciation for the year)

Table (2)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Depreciation expense is an expense, and it decreased the value of stockholder’s equity. Therefore, it is debited.
  • Accumulated depreciation is a contra-asset account. There is a decrease in assets, therefore it is credited.

(e)

To determine

To record: The adjusting entry for salaries expense.

(e)

Expert Solution
Check Mark

Answer to Problem 3.13E

Adjusting entry for salaries expense is as follows:

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Salaries expense 5,000
Salaries payable 5,000
(To record the salaries expense incurred at the end of the accounting year)

Table (5)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Salaries expense is an expense, and it decreased the value of stockholder’s equity. Therefore, it is debited.
  • Salaries payable is a liability account. There is a decrease in liability, therefore it is credited.

(f)

To determine

To record: The adjusting entry for supplies expense.

(f)

Expert Solution
Check Mark

Answer to Problem 3.13E

Adjusting entry for supplies expense is as follows:

Date Accounts title and explanation Post Ref. Debit ($) Credit ($)
December 31, 2015 Supplies expense 3,500
Supplies 3,500
(To record the supplies expense incurred at the end of the accounting year)

Table (3)

Explanation of Solution

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  The purpose of adjusting entries is to adjust the revenue, and the expenses during the period in which they actually occurs.

Following is the rules of debit and credit of above transaction:

  • Supplies expense is an expense, and it decreased the value of stockholder’s equity. Therefore, it is debited.
  • Supplies are an asset account. There is a decrease in assets, therefore it is credited.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 3 Solutions

Financial Accounting

Ch. 3 - 11.Provide an example of a prepaid expense. The...Ch. 3 - Provide an example of a deferred revenue. The...Ch. 3 - 13.Provide an example of an accrued expense. The...Ch. 3 - Provide an example of an accrued revenue. The...Ch. 3 - Sequoya Printing purchases office supplies for 75...Ch. 3 - Jackson Rental receives its September utility bill...Ch. 3 - 17.Global Printing publishes several types of...Ch. 3 - At the end of May, Robertson Corporation has...Ch. 3 - Prob. 19RQCh. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - Prob. 24RQCh. 3 - Describe the debits and credits for the three...Ch. 3 - In its first four years of operations, Chance...Ch. 3 - Prob. 27RQCh. 3 - Prob. 28RQCh. 3 - Determine revenues to be recognized (LO31) Below...Ch. 3 - Prob. 3.2BECh. 3 - Prob. 3.3BECh. 3 - Analyze the impact of transactions on the balance...Ch. 3 - Prob. 3.5BECh. 3 - At the beginning of May, Golden Gopher Company...Ch. 3 - Record the adjusting entry for prepaid rent (LO33)...Ch. 3 - Prob. 3.8BECh. 3 - Prob. 3.9BECh. 3 - Prob. 3.10BECh. 3 - Prob. 3.11BECh. 3 - Prob. 3.12BECh. 3 - Prob. 3.13BECh. 3 - Prob. 3.14BECh. 3 - Prob. 3.15BECh. 3 - Prob. 3.16BECh. 3 - Prob. 3.17BECh. 3 - Prob. 3.18BECh. 3 - Prob. 3.19BECh. 3 - Prob. 3.20BECh. 3 - Consider the following situations: 1.American...Ch. 3 - Consider the following situations: 1.American...Ch. 3 - Refer to the situations discussed in E31....Ch. 3 - Differentiate cash-basis expenses from...Ch. 3 - Prob. 3.5ECh. 3 - Listed below are all the steps in the accounting...Ch. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Prob. 3.10ECh. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Consider the following transactions. Required: For...Ch. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Prob. 3.4APCh. 3 - Prob. 3.5APCh. 3 - The year-end financial statements of Rattlers Tax...Ch. 3 - Prob. 3.7APCh. 3 - Prob. 3.8APCh. 3 - Consider the following transactions. Required: For...Ch. 3 - Prob. 3.2BPCh. 3 - Prob. 3.3BPCh. 3 - Prob. 3.4BPCh. 3 - Prob. 3.5BPCh. 3 - FIGHTING ILLINI Income Statement Service revenue...Ch. 3 - Prob. 3.7BPCh. 3 - Prob. 3.8BPCh. 3 - Prob. 3.1APCPCh. 3 - Prob. 3.2APFACh. 3 - Prob. 3.3APFACh. 3 - Prob. 3.4APCACh. 3 - Prob. 3.5APECh. 3 - Prob. 3.7APWC
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Financial Accounting - Long-term Liabilities - Bonds; Author: Finance & Accounting Videos by Prof Coram;https://www.youtube.com/watch?v=_1fwsJIGMos;License: Standard Youtube License