clark rentals company faced the following situations. view the situations. requirement 1. journalize the…

clark rentals company faced the following situations. view the situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. consider each fact separately. (record debits first, then credits. exclude explanations from any journal entries.) a. the business has interest expense of $3,800 that it must pay early in january 2024. accounts debit credit a. interest expense 3,800 interest payable 3,800 b. interest revenue of $4,000 has been earned but not yet received. accounts debit credit b. interest receivable 4,000 interest revenue 4,000 c. on july 1, 2023, when the business collected $12,000 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for two years rent.

clark rentals company faced the following situations. view the situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. consider each fact separately. (record debits first, then credits. exclude explanations from any journal entries.) a. the business has interest expense of $3,800 that it must pay early in january 2024. accounts debit credit a. interest expense 3,800 interest payable 3,800 b. interest revenue of $4,000 has been earned but not yet received. accounts debit credit b. interest receivable 4,000 interest revenue 4,000 c. on july 1, 2023, when the business collected $12,000 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for two years rent.

Answer

Explanation:

Step1: Calculate rent revenue for 2023

The tenant paid $12,000 for 2 - year rent on July 1, 2023. The monthly rent is $\frac{12000}{24}=500$. From July 1, 2023 to December 31, 2023, there are 6 months. So the rent revenue for 2023 is $500\times6 = 3000$.

Step2: Record the adjusting entry

We need to debit Unearned Rent Revenue (to reduce the unearned amount) and credit Rent Revenue (to recognize the earned revenue).

Answer:

Accounts Debit Credit
Unearned Rent Revenue 3000
Rent Revenue 3000