Explaining worksheet items
Consider the following adjusting entries:
|
Journal Entry |
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|
a. |
Apr 30 |
Rent expense |
900 |
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|
Prepaid rent |
900 |
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|
b. |
30 |
Unearned service revenue |
350 |
|
|
Service revenue |
350 |
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|
c. |
30 |
Supplies expense |
200 |
|
|
Supplies |
200 |
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|
d. |
30 |
Salary expense |
850 |
|
|
Salary payable |
850 |
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|
e. |
30 |
Depreciation expense—furniture |
450 |
|
|
Accumulated depreciation—furniture |
450 |
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Requirement
State one reason why each of the previous adjusting entries were made. Example: The explanation for journal entry a could be some of the Prepaid rent has expired. Another correct explanation would be the asset account Prepaid rent was overstated. A third correct explanation would be that Rent expense incurred was understated.