Question

jenkins rentals company faced the following situations. view the situations. requirement 1. journalize the adjusting entry needed at december 31, 2023, for each situation. consider each fact separately. (record debits first, then credits. exclude explanations from any journal entries.) b. interest revenue of $4,400 has been earned but not yet received. accounts debit credit b. interest receivable 4,400 interest revenue 4,400 c. on july 1, 2023, when the business collected $14,200 rent in advance, it debited cash and credited unearned rent revenue. the tenant was paying for two years rent. accounts debit credit c. unearned rent revenue 14200 rent revenue 14200

Explanation:

Step1: Determine monthly rent for situation c

The tenant paid $14200$ for 2 - year (24 - month) rent on July 1, 2023. The monthly rent is $\frac{14200}{24}$. From July 1, 2023 to December 31, 2023, there are 6 months. The amount of rent revenue to be recognized is $\frac{14200}{24}\times6=\frac{14200}{4}=3550$.

Step2: Record adjusting entry for situation b

Interest revenue of $4400$ has been earned but not received. Debit Interest Receivable to record the amount owed and credit Interest Revenue to recognize the revenue. So the entry is:
Debit: Interest Receivable 4400
Credit: Interest Revenue 4400

Step3: Record adjusting entry for situation c

We need to recognize the earned portion of the unearned rent revenue. Debit Unearned Rent Revenue and credit Rent Revenue for the amount of rent earned in 2023.
Debit: Unearned Rent Revenue 3550
Credit: Rent Revenue 3550

Answer:

For b:
Debit: Interest Receivable 4400
Credit: Interest Revenue 4400
For c:
Debit: Unearned Rent Revenue 3550
Credit: Rent Revenue 3550