1) Garcia Corporation received cash of $9,000 on August 1, 1998 for
one year's rent in advance and recorded the transaction with a
credit to Rent Revenue. The December 31, 1998 adjusting entry is
a. debit Rent Revenue and credit Unearned Rent, $3,750.
b. debit Rent Revenue and credit Unearned Rent, $5,250.
c. debit Unearned Rent and credit Rent Revenue, $3,750.
d. debit Cash and credit Unearned Rent, $5,250.
2) In November and December 1998, Kay Co., a newly organized magazine
publisher received $90,000 for 1,000 three-year subscriptions at $30
per year, starting with the January 1999 issue. Kay included the
entire $90,000 in its 1998 income tax return. What amount should
Kay report in its 1998 income statement for subscriptions revenue?
3) Porter Corp. reports operating expenses in two categories: (1)
selling and (2) general and administrative. The adjusted trial
balance at December 31, 1998, included the following expense
Accounting and legal fees $140,000
Loss on sale of long-term investments 30,000
Officers' salaries 180,000
Rent for office space 180,000
Sales salaries and commissions 110,000
One-half of the rented premises is occupied by the sales department.
How much of the expenses listed above should be included in Porter's
selling expenses for 1998?
debit Rent Revenue and credit Unearned Rent, $5,250. (7 months of rent ...
Adjusting Entries, Revenue, Expenses and Trial Balance are investigated.