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Consider the following situations for Shocker:
a. On November 28, 2018, Shocker receives a $4,500 payment from a customer for services to be rendered evenly over
the next three months. Deferred Revenue is credited.
b. On December 1, 2018, the company pays a local radio station $2,700 for 30 radio ads that were to be aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited.
c. Employee salaries for the month of December totaling $8,000 will be paid on January 7, 2019.
d. On August 31, 2018, Shocker borrows $70,000 from a local bank. A note is signed with principal and 9% interest to be
paid on August 31, 2019.
Required:
Record the necessary adjusting entries for Shocker at December 31, 2018. No adjusting entries were made during the year

Respuesta :

oreoluwa2001ng

Answer:

Explanation:

1. 28/11 Debit: Bank. $4,500

Credit: deferred Rev $4,500

Being advance pmt for services

2. 01/12 Debit: advert exp $900

Debit: Ad Prepaym. $1,800

Credit: Bank. $2,700

Being payment for advert

3. 31/12 Debit: Salary payable$8000

Credit: Salary Exp. $8000

Being Accrued salaries

4 31/08 Debit: Bank. $70,000

Credit: Loan A/c. $70,000

Being bank loan borrowed

5. 31/12 Debit: into on loan $2,100

Credit: Bank. $2,100

Being accrued interest on loan borrowed.

obasola1

Answer:

1. GENERAL JOURNAL  

ACCOUNT TITLE  DEBIT CREDIT

DEC 31,2018    

a Deferred Revenue  1,500  

Service Revenue            1500

   

b Advertising Expense  900  

Prepaid Advertising      900

   

c Salaries Expense  8000  

Salaries Payable              8000

   

d. Interest Expense  2100  

interest Payable              2100

(to adjust for accrued interest expense)

2 a,$1500 for the next three months

b.$900

c.Salaries Expense will be recorded as accrual, so there wont be any computation

d.I=$2100

Explanation:

 GENERAL JOURNAL  

ACCOUNT TITLE  DEBIT CREDIT

DEC 31,2018    

a Deferred Revenue  1,500  

Service Revenue            1500

   

b Advertising Expense  900  

Prepaid Advertising      900

   

c Salaries Expense  8000  

Salaries Payable              8000

   

d. Interest Expense  2100  

interest Payable              2100

(to adjust for accrued interest expense)

2. Service Revenue is credited and the deferred revue is on the debit side  

therefore

$4500*1/3

=$1500 for the next three months

b. one-third of advertisement(10/30) has been aired. Advertising expenses is debited while prepaid advertising is credited

$2700*10/30

$900

c.Salaries Expense will be recorded as accrual, so there wont be any computation

d.Interest for four month from September 1 to December 31

I=principal *rate *time

I=70000*9%*4/12

I=$2100

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