jenkins rentals company faced the following situations. requirement 1. journalize the adjusting entry needed…

jenkins rentals company faced the following 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 $3,100 that it must pay early in january 2024. accounts debit credit a. interest expense 3,100 interest payable 3,100 b. interest revenue of $4,400 has been earned but not yet received. accounts debit credit b. interest receivable 4,400 interest revenue 4,400 c. on july 1, 2023, when the business collected $14,200 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for rent.

jenkins rentals company faced the following 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 $3,100 that it must pay early in january 2024. accounts debit credit a. interest expense 3,100 interest payable 3,100 b. interest revenue of $4,400 has been earned but not yet received. accounts debit credit b. interest receivable 4,400 interest revenue 4,400 c. on july 1, 2023, when the business collected $14,200 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for rent.

Answer

Explanation:

Step1: Determine rent - revenue period

The rent was collected on July 1, 2023, for a certain period. By December 31, 2023, 6 months have passed (July - December). Assuming the rent is for a 1 - year period, the portion of unearned rent revenue that has been earned is calculated.

Step2: Calculate earned rent revenue

If the total unearned rent revenue was $14,200 for a 1 - year (12 - month) period, the monthly rent is $\frac{14200}{12}$. For 6 months, the earned rent revenue is $\frac{14200}{12}\times6 = 7100$.

Step3: Record the adjusting entry

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

Answer:

Accounts Debit Credit
Unearned Rent Revenue 7100
Rent Revenue 7100