Chapter 4, Problem 17E

To determine

Requirement 1

Introduction: Adjusting Entries are journal entries usually dated the last day of the accounting period to bring the balance sheet and income statement up to date on the accrual basis of accounting. This will be made to prepare accurate yearend financial statements. It involves matching all revenues earned and expenses incurred for the financial year so that correct profits are calculated.

To determine: Adjusting entries based on the information in (a) and (b) of Trey Company.

To determine

Requirement 2

Introduction: Reversing Entries are the entries that will be made to remove adjusting entries which was created to close the accounts on prior accounting period. These are made on first date of next accounting period. In this requirement we consider that we do not use reversing entries

To determine: Journal entries based on the information in (a) and (b) of Trey Company.

a) Payment of rent

	Dr	Cr
Rent Expense Account	$2,800
Rent Payable Account	$2,800
cash		$5600

b) Receipt of rent

	Dr	Cr
cash	$1700
Rent Revenue Account		$850
Rent Receivable Account		$850

To determine

Requirement 3

Introduction: Reversing Entries are the entries that will be made to remove adjusting entries which was created to close the accounts on prior accounting period. These are made on first date of next accounting period.

To determine: Reversing entries and Journal entries based on the information in (a) and (b) of Trey Company.