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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.

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