Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Chapter 3, Problem 3.7BE
Record the
Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $25,200 ($2,100/month) in advance on October 1. (1) Record the payment of rent in advance on October 1. (2) Record the adjusting entry on December 31. (3) Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).
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Students have asked these similar questions
The Eldorado Corporation's controller prepares adjusting entries only at the end of the reporting year. The following adjusting entries
were prepared on December 31, 2021:
Debit
Credit
Interest expense
5,400
Interest payable
Rent expense
Prepaid rent
Interest receivable
Interest revenue
5,400
17,500
17,500
450
450
Additional information:
1. The company borrowed $180,000 on March 31, 2021. Principal and interest are due on March 31, 2022. This note is the company's
only interest-bearing debt.
2. Rent for the year on the company's office space is $42,000. The rent is paid in advance.
3. On October 31, 2021, Eldorado lent money to a customer. The customer signed a note with principal and interest at 3.0% due in one
year.
Required:
1. What is the interest rate on the company's note payable?
2. The 2021 rent payment was made at the beginning of which month? (Do not round your intermediate calculation.)
3. How much did Eldorado lend its customer on October 31?
6) Suppose that our business uses a monthly fiscal period. On March 1, 2020, we paid 6 months of rent, a value of $9,000 to our landlord, in advance, for the coming months. If we were to create an Adjusting Entry to record the consumption of prepaid rent on June 31, 2020, what would that look like?
1.Debit - Rent Expense $9000 </> Credit - Prepaid Rent $9000
2.Debit - Rent Expense $6000 </> Credit - Prepaid Rent $6000
3.Debit - Rent Expense $4500 </> Credit - Cash $4500
4.Debit - Rent Expense $7500 </> Credit - Cash $7500
5) Suppose that our business uses a monthly fiscal period. On March 1, 2020, we paid 6 months of rent, a value of $9,000 to our landlord, in advance, for the coming months. What would the journal entry in the general journal for the purchase of Prepaid rent look like?
1.Debit - Rent Expense $9000 </> Credit - Prepaid Rent $9000
2.Debit - Rent Expense $9000 </> Credit - Cash $9000
3.Debit - Prepaid Rent $9000 </> Credit - Building $9000
4.Debit - Prepaid Rent $9000 </> Credit - Cash $9000
Chapter 3 Solutions
Financial Accounting
Ch. 3 - Prob. 1RQCh. 3 - 2.Discuss the major principle that describes...Ch. 3 - 3.Samantha is a first-year accounting student. She...Ch. 3 - 4.Describe when revenues and expenses are...Ch. 3 - Rip Side of Question 7 5.Executive Lawn provides...Ch. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Consider the information in Question 7. Using...Ch. 3 - Prob. 9RQCh. 3 - There are two basic types of adjusting...
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 - Fill in the blank associated with each adjusting...Ch. 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 - Record the adjusting entry for deferred revenue...Ch. 3 - Prob. 3.11BECh. 3 - Midshipmen Company borrows 15,000 from Falcon...Ch. 3 - Prob. 3.13BECh. 3 - For each of the following accounts, indicate...Ch. 3 - Prob. 3.15BECh. 3 - Prob. 3.16BECh. 3 - Prob. 3.17BECh. 3 - The following account balances appear in the 2018...Ch. 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 - Refer to the information in E310. Calculate the...Ch. 3 - Prob. 3.12ECh. 3 - Below are transactions for Hurricane Company...Ch. 3 - Prepare an adjusted trial balance (LO33, 34) The...Ch. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - On January 1, 2018, Red Flash Photography had the...Ch. 3 - Prob. 3.21ECh. 3 - Consider the following transactions. Required: For...Ch. 3 - Prob. 3.2APCh. 3 - Record adjusting entries (LO3-3) The information...Ch. 3 - Crimson Tide Music Academy offers lessons in...Ch. 3 - Prob. 3.5APCh. 3 - The year-end financial statements of Rattlers Tax...Ch. 3 - Complete the accounting cycle after adjusting...Ch. 3 - The general ledger of Red Storm Cleaners at...Ch. 3 - The general ledger of Zips Storage at January 1,...Ch. 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 - The general ledger of Pipers Plumbing at January...Ch. 3 - The general ledger of Jackrabbit Rentals at...Ch. 3 - You may refer to the opening story of Tony and...Ch. 3 - Prob. 3.2APFACh. 3 - Prob. 3.3APFACh. 3 - Prob. 3.4APCACh. 3 - Prob. 3.5APECh. 3 - Prob. 3.7APWC
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- Suppose Macomb, a specialty clothing store, rents space at a local mall for one year, paying $16,200 ($1,350/month) in advance on October 1. Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Prepaid Rent and Rent Expense (assuming the balance of Prepaid Rent at the beginning of the year is $0).arrow_forwardConsider the following independent situations for Island Vista: (Click the icon to view the indipendent situations.) a. Island Vista had a January 1, 2024 beginning balance in its Prepaid Rent account of $2,200. During the year the company made payments for prepaid rent of $1,400. At the end of the year, December 31, 2024, the balance in the Prepaid Rent account was $300. What was the amount of rent expense for the year? Rent expense for the year =arrow_forwardThe balance in the prepaid rent account before adjustment at the end of the year is $11,940, which represents 12 months' rent paid on December 1. The adjusting entry required on December 31 is a-debit Rent Expense, $10,945, credit Prepaid Rent, $995 b-debit Rent Expense, $995, credit Prepaid Rent, $995 c-debit Prepaid Rent, $995, credit Rent Expense, $995 d-debit Prepaid Rent, $10,945, credit Rent Expense, $995arrow_forward
- Sanborn company rents space to a tenant for $2,500 per month. The tenant currently owes rent for November and December. The tenant has agreed to pay the November, December, and January rents in full on January 15 and has agreed not to fall behind again. Assuming adjustments are only made at year-end, the adjusting entry needed on December 31 is: __ Debit Rent Receivable, $7,500: credit Rent Earned, $7,500. ___ Debit Unearned Rent, $5,000: credit Rent Earned, $5,000 ___ Debit Unearned Rent, $2,500: credit Rent Earned, $2,500 ___ Debit Rent Receivable, $5,000: credit Rent Earned, $5,000. ___ Debit Rent Receivable, $2,500: credit Rent Earned, $2,500.arrow_forwardBlossom Company received a check for $21240 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $21240. Financial statements will be prepared on July 31. Blossom should make the following adjusting entry on July 31 O debit Unearned Rent Revenue, $3540; credit Rent Revenue, $3540. O debit Rent Revenue, $3540; credit Unearned Rent Revenue, $3540. O debit Unearned Rent Revenue, $21240; credit Rent Revenue, $21240. O debit Cash, $21240; credit Rent Revenue, $21240.arrow_forward1. What is the rent revenue for the year ended June 30, 2022? 2. On June 30, 2023, what amount should be reported as accrued rent receivable?arrow_forward
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