Question

jenkins rentals company faced the following situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. consider each fact separately (explanations from any journal entries.) a. the business has interest expense of $3,100 that it must pay early in january 2024. accounts debit credit a. interest expense 3,100 interest payable 3,100 b. interest revenue of $4,400 has been earned but not yet received. accounts debit credit b.

Explanation:

Step1: Identify the accounting principle

Under accrual - accounting, revenues and expenses are recorded when they are earned or incurred, not when cash is received or paid.

Step2: Analyze situation b

Interest revenue has been earned but not received. We need to record this revenue. Debit an asset account (Interest Receivable) to show that the company has a right to receive the money, and credit Interest Revenue to recognize the income.

Answer:

Accounts	Debit	Credit
Interest Revenue		4400