Chapter+4-1

Chapter+4-1 - M44. (a) 1. Rent revenue is now earned. 2....

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M4–4. (a) 1. Rent revenue is now earned. 2. Cash was received in the past – a deferred revenue was recorded. 3. Amount: $1,000 ÷ 4 months = $250 earned Adjusting entry – Unearned rent revenue ( - L). ................................................. 250 Rent revenue (+R, +SE). ............................................................. 250 (b) 1. Depreciation Expense on the equipment is now incurred. 2. Cash was paid in the past when the equipment was purchased -- a deferred expense was recorded. The net book value of the equipment is overstated. Accumulated Depreciation (the contra-account) needs to be increased for the amount used during the period. 3. Amount: $3,000 given Adjusting entry – Depreciation expense (+E, - SE). .............................................................. 3,000 Accumulat ed depreciation (+XA, - A). ...................................................... 3,000 (c) 1. Insurance expense was incurred in the period. 2. Cash was paid for the insurance in the past – a deferred expense was recorded. 3.
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Chapter+4-1 - M44. (a) 1. Rent revenue is now earned. 2....

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