225ch 4 solutions

225ch 4 solutions - E 427 (LO2) 1. Adjusting Entries:...

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E 4–27 (LO2) Adjusting Entries: Prepaid Expenses and Unearned Revenues 1. Original entry Prepaid Insurance. .............................................................. 5,400 Cash. ................................................................................ 5,400 Adjusting entry Insurance Expense. ............................................................. 900 Prepaid Insurance. ......................................................... 900 ($5,400/3 years = $1,800 per year; $1,800 year × 1/2 year = $900)
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E 4–27 (LO2) (Continued) 2. Original entry Prepaid Property Taxes. ..................................................... 2,400 Cash. ................................................................................ 2,400 Adjusting entry Property Tax Expense. ........................................................ 2,200 Prepaid Property Taxes. ................................................ 2,200 ($2,400/12 months = $200 per month; $200 × 11 months = $2,200) 3. Original entry Prepaid Subscriptions. ....................................................... 360 Cash. ................................................................................ 360 Adjusting entry Subscription Expense. ........................................................ 80 Prepaid Subscriptions. .................................................. 80 ($360/36 months = $10 per month; $10 8 months = $80) 4. Original entry Cash. ..................................................................................... 3,600 Unearned Consulting Fees Revenue. .......................... 3,600 Adjusting entry Unearned Consulting Fees Revenue. ................................ 700 Consulting Fees Revenue. ............................................ 700 ($3,600/18 months = $200 per month; $200 per month 3 1/2 months = $700) 5. Original entry Cash. ..................................................................................... 900 Unearned Rent Revenue. .............................................. 900 Adjusting entry Unearned Rent Revenue. .................................................... 300 Rent Revenue. ................................................................ 300 ($900/6 months = $150 per month; $150 2 months = $300)
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E 4–27 (LO2) (Concluded) 6. Original entry Cash. ..................................................................................... 14,400 Unearned Interest Revenue. ......................................... 14,400
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This note was uploaded on 04/29/2008 for the course ACCT 225 taught by Professor Canace during the Spring '08 term at South Carolina.

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225ch 4 solutions - E 427 (LO2) 1. Adjusting Entries:...

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