Your Answer Is Partially Correct Try Again For Each Of The A

Your Answer Is Partially Correct Try Againfor Each Of The Above Tra

Your answer is partially correct. Try again. For each of the above transactions, prepare the adjusting journal entry that is required on December 31. (Hint: Use the account Service Revenue for item 3 and Maintenance and Repairs Expense for item 4.) (Round answers to 0 decimal places, e.g., 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Dec. 31, 2017 enter an account title to record the first transaction enter a debit amount enter a credit amount enter an account title to record the first transaction enter a debit amount enter a credit amount

Dec. 31, 2017 enter an account title to record the second transaction enter a debit amount enter a credit amount enter an account title to record the second transaction enter a debit amount enter a credit amount

Dec. 31, 2017 enter an account title to record the third transaction enter a debit amount enter a credit amount enter an account title to record the third transaction enter a debit amount enter a credit amount

Dec. 31, 2017 enter an account title to record the fourth transaction enter a debit amount enter a credit amount enter an account title to record the fourth transaction enter a debit amount enter a credit amount

Dec. 31, 2017 enter an account title to record the fifth transaction enter a debit amount enter a credit amount enter an account title to record the fifth transaction enter a debit amount enter a credit amount

Your answer is partially correct. Try again. Post the journal entries in parts (a) and (b) to T-accounts and determine the final balance in each account balance. (Note: Posting to the Cash account is not required.) (Round answers to 0 decimal places, e.g., 5,275. Post entries in the order displayed in the problem statement.)

Paper For Above instruction

Preparing accurate adjusting journal entries at the end of an accounting period is crucial for reflecting the true financial position of a company. This process involves analyzing each transaction to determine if adjustments are needed to recognize revenues and expenses in the correct accounting period, following the accrual basis of accounting. In this discussion, we will focus on the specific adjustments required on December 31, 2017, based on the transactions listed, emphasizing the use of appropriate accounts such as Service Revenue and Maintenance and Repairs Expense.

Many transactions require adjusting entries to ensure that revenues and expenses are recorded in the period they pertain to. For example, prepaid expenses such as insurance and rent often require adjustments to account for the consumption of these benefits over time. Similarly, unearned revenues need to be recognized as earned when the services are provided. Analyzing each transaction individually ensures accurate representation of financial results. For transactions requiring adjustments, the accounting principle of matching expenses with revenues guides the journal entries.

In the first instance, adjusting entries for prepaid insurance typically involve recognizing the portion of insurance expense incurred during the period. If the company paid $700 for insurance coverage, and a portion of that coverage has been used, an adjusting entry will debit Insurance Expense and credit Prepaid Insurance. This aligns with the concept that expenses should be recognized when incurred, not when paid, adhering to the matching principle. The specific amount varies depending on the time elapsed and coverage used.

Prepaid rent adjustments follow a similar pattern. If the company paid $5,440 for rent in advance, an adjusting entry at period-end would debit Rent Expense and credit Prepaid Rent for the amount of rent applicable to the period. This ensures rent expense reflects usage during the period, and Prepaid Rent decreases accordingly in the balance sheet. Accurate adjustment helps in portraying the company's occupancy costs properly.

Unearned service revenue also requires adjustments when services are performed that were paid for in advance. For instance, if unearned revenue amounting to $960 was received, and part of that work has been completed by December 31, 2017, an entry will debit Unearned Service Revenue and credit Service Revenue. This recognizes unearned income as earned revenue, aligning with revenue recognition principles.

Prepaid cleaning expenses, similar to other prepaid expenses, must be adjusted to account for amounts used during the period. This adjustment involves debiting Cleaning Expense and crediting the prepayment account, which could be Prepaid Cleaning. Accurate adjustment ensures expense recognition aligns with the benefits received during the period.

Insurance expense reflects the utilization of prepaid insurance over time. The adjustment generally involves debiting Insurance Expense and crediting Prepaid Insurance by the amount representing the insurance consumed during the period, aligning with accrual principles.

Rent expense accrual or adjustment is based on the proportion of rent applicable to the current period. This is recorded by debiting Rent Expense and crediting Prepaid Rent or a similar account, depending on initial payments made.

Service revenue adjustments typically involve recognizing revenue earned but not yet billed or received in cash. For example, if services were provided but not yet recorded, an adjustment debits Accounts Receivable and credits Service Revenue.

Maintenance and Repairs Expense, which often involves costs incurred for maintaining company assets, needs adjustments based on actual expenses incurred but not yet recorded. Debiting Maintenance and Repairs Expense and crediting accounts payable or accrued expenses appropriately reflects these costs.

These adjustments are essential for preparing accurate financial statements, as they ensure the income statement correctly reports revenues earned and expenses incurred, while the balance sheet reflects assets and liabilities appropriately. Proper understanding and application of these adjustments uphold the integrity of financial reporting and aid stakeholders in making informed decisions.

Conclusion

Effective management of adjusting journal entries is fundamental for accurate financial accounting. By analyzing each transaction with attention to the matching principles and revenue recognition standards, accountants ensure that the financial statements present a fair and truthful view of the company's fiscal health at period-end. Employing precise entries, supported by reliable documentation, guarantees compliance with accounting standards and enhances the credibility of financial reports.

References

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