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

jenkins retail 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 two - year rent.

jenkins retail 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 two - year rent.

Answer

Explanation:

Step1: Calculate monthly rent revenue

The rent was for 2 years (24 months) and the total amount received in advance on July 1, 2023 was $14,200. From July 1 - December 31, 2023, 6 months have passed. The monthly rent revenue is $\frac{14200}{24}$.

Step2: Calculate rent revenue for 6 - month period

The rent revenue to be recognized for the 6 - month period from July 1 - December 31, 2023 is $\frac{14200}{24}\times6=\frac{14200}{4}=3550$.

Step3: Record adjusting entry

We need to debit Unearned Rent Revenue (to reduce the liability as revenue is now earned) and credit Rent Revenue.

Answer:

Accounts Debit Credit
Unearned Rent Revenue 3550
Rent Revenue 3550