Atlantic Company Is Completing the Information Processing Cycle at the End

question 85

Essay

Atlantic Company is completing the information processing cycle at the end of the annual accounting period, December 31, 20X1. Four adjusting entries must be made at this date to update the accounts. The following accounts, selected from Atlantic's chart of accounts, are to be used for this purpose. They are coded to the left for easy reference. $$\begin{array} { | l | l | } \hline \text { A. Office Supplies } & \text { D. Office Supplies Expense } \\\hline \text { B. Trade Receivables } & \text { K. Rent Expense } \\\hline \text { C. Accumulated Depreciation } & \text { L. Bad Debt Expense } \\\hline \text { D. Interest Receivable } & \text { M. Depreciation Expense } \\\hline \text { E. Notes Payable } & \text { N. Interest Expense } \\\hline \text { F. Interest Payable } & \text { O. Sales Revenue } \\\hline \text { G. Property Tax Payable } & \text { P. Rent Revenue } \\\hline \text { H. Unearned Rent } & \text { Q. Interest Revenue } \\\hline \text { I. Rent Payable } & \text { R. Equipment } \\\hline\end{array}$$ You are to indicate the appropriate account code and amount for each required adjusting entry at December 31, 20X1

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the date of its maturity, including all interest and principal repayments.

Semi-Annually

Occurring or calculated twice a year, often used in the context of interest payments or other financial assessments.

Face Value

The nominal or stated value of a bond, share of stock, or other financial instruments, typically used as a reference for calculating interest, dividends, or premiums.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.