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. accounts debit credit c.

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. accounts debit credit c.

Answer

Explanation:

Step1: Calculate monthly rent revenue

The tenant paid $12,000 for two - year rent (24 months). So the monthly rent revenue is $\frac{12000}{24}=500$. From July 1, 2023, to December 31, 2023, is 6 months.

Step2: Determine the amount of rent revenue to be recognized

The amount of rent revenue to be recognized is $500\times6 = 3000$.

Step3: 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