At December 31, 2013, for the Microchip Company for each of thefollowing situations assume that no financial statements wereprepared during the year and no adjusting entries wererecorded.
1. On October 1, 2013, Microchip lent $91,000 to another company. Anote was signed with principal and 8% interest to be paid onSeptember 30, 2014.
2. On November 1, 2013, the company paid its landlord $9,600representing rent for the months of November through January.Prepaid rent was debited.
3. On August 1, 2013, collected $15,600 in advance rent from anothercompany that is renting a portion of Microchip
At December 31, 2013, for the Microchip Company for each of thefollowing situations assume that no financial statements wereprepared during the year and no adjusting entries wererecorded. |
| 1. | On October 1, 2013, Microchip lent $91,000 to another company. Anote was signed with principal and 8% interest to be paid onSeptember 30, 2014. |
| 2. | On November 1, 2013, the company paid its landlord $9,600representing rent for the months of November through January.Prepaid rent was debited. |
| 3. | On August 1, 2013, collected $15,600 in advance rent from anothercompany that is renting a portion of Microchip |
Related questions
| Practice Problem 1 On October 1, 2016, Microsun lent $90,000 toanother company. A note was signed with principal and 8% interestto be paid on September 30, 2017. On November 1, 2016, the company paid its landlord $6,000representing rent for the months of November through January.Prepaid rent was debited. On August 1, 2016, collected $12,000 in advance rent fromanother company that is renting a portion of Microsun's factory.The $12,000 represents one year's rent and the entire amount wascredited to rent revenue. Depreciation on office equipment is $4,500 for the year. Vacation pay for the year that had been earned by employees butnot paid to them or recorded is $8,000. The company recordsvacation pay as salaries expense. Microsun began the year with $2,000 in its asset account,supplies. During the year, $6,500 in supplies were purchased anddebited to supplies. At year-end, supplies costing $3,250 remain onhand. | |
| Required: Prepare the necessary adjusting entries at December 31, 2016,for the Microsun Company for each of the following situations.Assume that no financial statements were prepared during the yearand no adjusting entries had been recorded. If Microsun's accountant employed reversing entries foraccruals, which adjusting entries would she likely reverse at thebeginning of the following year? Prepare the appropriate reversing entries at the beginning of2017. Suppose for item #6 that Microsun began the year with $2,000 inits Supplies Expense account. During the year, $6,500 in supplieswere purchased and debited to Supplies Expense. At year-end,supplies costing $3,250 remain on hand. Prepare the adjustingjournal entry. Given the situation described in Requirement 4 above, preparethe reversing journal entry, if one is deemed necessary. | |
