Adjusting Entries Data Relating to the Balances of Various Accounts Affected by Affected

question 40

Essay

Adjusting entries
Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries, which caused the changes in the balances, are not given.) You are asked to supply the missing journal entries, which would logically account for the changes in the account balances.
1. Interest receivable at January 1, 2020, was $ 2,000. During 2020, cash received from debtors for interest on outstanding notes receivable was $ 4,700. The 2020 statement of comprehensive income showed Interest Revenue of $ 4,900. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made.
2. Unearned rent at January 1, 2020 was $ 5,300, and at December 31, 2020 was $ 6,000. The records indicate cash receipts from rental sources during 2020 were $ 45,000, all of which were credited to the Unearned Rent Account. You are to prepare the missing adjusting entry.
3. Accumulated Depreciation-Equipment at January 1, 2020, was $ 120,000, and at December 31, 2020, was $ 150,000. During 2020, one piece of equipment was sold. The equipment had an original cost of $ 10,000 and was three-quarters depreciated when sold. You are to prepare the missing adjusting entry.
4. Allowance for doubtful accounts on January 1, 2020, was $ 50,000. The balance in the allowance account on December 31, 2020, after making the annual adjusting entry, was $ 65,000. During 2020 bad debts of $ 30,000 were written off. You are to provide the missing adjusting entry.
5. Prepaid rent at January 1, 2020, was $ 24,000. During 2020 rent payments of $ 160,000 were made and debited to Rent Expense. The 2020 statement of comprehensive income shows Rent Expense of $ 180,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made.
6. Retained earnings at January 1, 2020, was $ 150,000 and at December 31, 2020, it was $ 210,000. During 2020, cash dividends of $ 50,000 were paid, which were correctly debited to Retained Earnings. You are to prepare the missing closing entry to close the Income Summary account.

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Definitions:

Posterior Cavity

The back part of the body cavity that houses the brain and spinal cord in vertebrates, also known as the dorsal body cavity.

Astigmatism

A refractive error of the eye that causes distorted or blurred vision due to an irregular curvature of the cornea or lens.

Refractory Error

A visual impairment where the eye does not bend or refract light correctly, leading to blurred vision.

Intraocular Pressure

The fluid pressure inside the eye, essential for maintaining the eye's shape and proper optical function.