thornton company faced the following situations. view the situations. requirement 1. journalize the…

thornton company faced the following situations. view the situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. (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 $4,200 has been earned but not yet received. accounts debit credit b. interest receivable 4,200 interest revenue 4,200 c. on july 1, 2023, when the business collected $12,600 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for two - year rent.

thornton company faced the following situations. view the situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. (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 $4,200 has been earned but not yet received. accounts debit credit b. interest receivable 4,200 interest revenue 4,200 c. on july 1, 2023, when the business collected $12,600 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for two - year rent.

Answer

Explanation:

Step1: Calculate the earned rent revenue

The business collected $12,000 rent in - advance on July 1, 2023 for two - year rent. The rent period is from July 1, 2023 to June 30, 2025. For the year 2023 (July 1 - December 31), 6 months of rent has been earned. The total rent is for 24 months. So the monthly rent is $\frac{12000}{24}=500$. The rent earned in 2023 is $500\times6 = 3000$.

Step2: Make the adjusting entry

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

Accounts Debit Credit
Unearned Rent Revenue 3000
Rent Revenue 3000

Answer:

Accounts Debit Credit
Unearned Rent Revenue 3000
Rent Revenue 3000