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Adjusting & closing entries: unearned rent, depreciation, do

Please help me with the following closing entries. Please indicate DR (debit ) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

1. Unearned rent at 1/1/07 was $5,300 and at 12/31/07 was $8,000. The records indicate cash receipts from rental sources during 2007 amounted to $40,000, all of which was credited to the Unearned Rent Account.

2. Accumulated depreciation-equipment at 1/1/07 was $230,000. At 12/31/07 the balance of the account was $270,000. During 2007, one piece of equipment was sold. The equipment had an original cost of $40,000 and was 3/4 depreciated when sold. You are to prepare the missing adjusting entry.

3. Allowance for doubtful accounts on 1/1/07 was $50,000. The balance in the allowance account on 12/31/07 after making the annual adjusting entry was $65,000 and during 2007 bad debts written off amounted to $30,000.

4. Prepaid rent at 1/1/06 was $20,000. During 2006 rent payments of $116,000 were made and charged to "rent expense." The 2006 income statement shows as a general expense the item "rent expense" in the amount of $122,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made.

5. Retained earnings at 1/1/07 was $150,000 and at 12/31/07 it was $210,000. During 2007, cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry.

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Solution Preview

Please help me with the following closing entries. Please indicate DR (debit ) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

1. Unearned rent at 1/1/07 was $5,300 and at 12/31/07 was $8,000. The records indicate cash receipts from rental sources during 2007 amounted to $40,000, all of which was credited to the Unearned Rent Account.

DR Cash, 40,000
CR Unearned Rent, 40,000

DR Unearned Rent, 37,300
CR Rent Revenue, 37,300

2. Accumulated depreciation-equipment at 1/1/07 was $230,000. At 12/31/07 the balance of the ...

Solution Summary

This solution is comprised of a detailed explanation to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made.

$2.19