On November 1,2011,Bug Busters Collected $6,000 in Advance for Three

question 18

Short Answer

On November 1,2011,Bug Busters collected $6,000 in advance for three months of service to be provided beginning on that date.Bug credited unearned rent revenue for $6,000.Prepare the adjusting entry required on December 31,2011 (assuming that no adjusting entries have been made during the year).

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Definitions:

Annually Compounded

Interest on an investment that is calculated once a year on both the initial principal and the accumulated interest from previous periods.

Nominal Rate

The annual interest rate not adjusted for inflation or the compounding of interest.

RRSP

Registered Retirement Savings Plan, a retirement savings and investing vehicle for employees and the self-employed in Canada.

Month-End Contributions

Investments or payments made into a financial account or plan at the end of the month for accounting or strategy purposes.