Question

for journal entries 1 through 10, identify the explanation that mostly closely describes it.

Explanation:

1. Interest Receivable and Interest Revenue: Debiting Interest Receivable and crediting Interest Revenue is to record accrued interest revenue. Interest has been earned but not yet received in cash.
2. Interest Expense and Interest Payable: Debiting Interest Expense and crediting Interest Payable records accrued interest expense. The expense has been incurred but not yet paid.
3. Unearned Revenue and Services Revenue: Debiting Unearned Revenue and crediting Services Revenue records the earning of previously unearned income. The service has now been provided.
4. Cash and Unearned Revenue: Debiting Cash and crediting Unearned Revenue records cash receipt of unearned revenue. Cash has been received for a service not yet provided.
5. Accounts Payable and Cash: Debiting Accounts Payable and crediting Cash records cash payment of an accrued expense. The liability for the expense is being settled.
6. Cash and Accounts Receivable: Debiting Cash and crediting Accounts Receivable records cash receipt of an accrued revenue. The revenue that was previously recorded as receivable is now received in cash.
7. Prepaid Rent and Cash: Debiting Prepaid Rent and crediting Cash records the prepayment of rent. It is an asset - the right to use the rented property in the future.
8. Depreciation Expense and Accumulated Depreciation: Debiting Depreciation Expense and crediting Accumulated Depreciation allocates the cost of a long - term asset over its useful life.
9. Salaries Expense and Salaries Payable: Debiting Salaries Expense and crediting Salaries Payable records accrued salaries expense. The employees have worked but not yet been paid.
10. Insurance Expense and Prepaid Insurance: Debiting Insurance Expense and crediting Prepaid Insurance records the expiration of prepaid insurance. The insurance coverage has been used up.

Answer:

1. To record accrued interest revenue.
2. To record accrued interest expense.
3. To record the earning of previously unearned income.
4. To record cash receipt of unearned revenue.
5. To record cash payment of an accrued expense.
6. To record cash receipt of an accrued revenue.
7. To record prepayment of rent.
8. To allocate cost of long - term asset (depreciation).
9. To record accrued salaries expense.
10. To record expiration of prepaid insurance.