Chapter 4 - Name Date 1 Reese Company purchased office...

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Chapter 4 Cohen & Boyd, Inc., publishers of movie and song trivia books, made the following errors in adjusting the accounts at year-end (December 31): a. Did not accrue $1,600 owed to the company by another company renting part of the building as a storage facility. b. Did not record $15,900 depreciation on the equipment costing $108,000. c. Failed to adjust the Unearned Fee Revenue account to reflect that $2,000 was earned by the end of the year. d. Recorded a full year of accrued interest expense on a $20,400, 11 percent note payable that has been outstanding only since November 1. e. Failed to adjust Prepaid Insurance to reflect that $640 of insurance coverage has been used. a. No journal entry required b. No journal entry required c. No journal entry required d. Interest expense 2,244 Interest payable 2,244 e. No journal entry required Prepare the adjusting journal entry that should have been made at year-end Transaction General Journal Debit Credit a. Rent receivable 1,600 Rent revenue 1,600 b. Depreciation expense 15,900 Accumulated depreciation 15,900 c. Unearned fee revenue 2,000 Fee revenue 2,000 d. Interest expense 374 Interest payable 374 e. Insurance expense 640 Prepaid insurance 640 In each of the following transactions (a) through (c) for Romney’s Marketing Company, use the three-step process illustrated in the chapter to record the adjusting entry at year-end December 31, 2015. The process includes (1) determining if revenue was earned or an expense incurred, (2) determining whether cash was received or paid in the past or will be received or paid in the future, and (3) computing the amount of the adjustment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Collected $3,000 rent for the period December 1, 2015, to April 1, 2016, which was credited to Unearned Rent Revenue on December 1, 2015. b. Purchased a machine for $38,000 cash on January 1, 2011. The company estimates annual depreciation at $3,600. c. Paid $2,900 for a two-year insurance premium on July 1, 2015; debited Prepaid Insurance for that amount. Transaction General Journal Debit Credit a. Unearned rent revenue 750 Rent revenue 750 b. Depreciation expense 3,600 Accumulated depreciation 3,600 c. Insurance expense 725 Prepaid insurance 725 John’s Boat Yard, Inc., repairs, stores, and cleans boats for customers. It is completing the accounting process for the year just ended, November 30, 2015. The transactions during 2015 have been journalized and posted. The following data with respect to adjusting entries are available: a. John’s winterized (cleaned and covered) three boats for customers at the end of November, but did not record the service for $2,800. b. On October 1, 2015, John’s paid $1,680 to the local newspaper for an advertisement to run every Thursday for 12 weeks. All ads have been run except for three Thursdays in December to complete the 12-week contract.
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