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  3. prepare the adjusting journal entries ajes that should be made...

Question: prepare the adjusting journal entries ajes that should be made...

Question details
  1. Prepare the Adjusting Journal Entries (AJEs) that should be made on December 31, 2015, the end of the accounting year, for each of the following independent situations. If no AJE is required, indicate “none.” Assume the firm only makes AJEs at the end of the accounting year. . In addition, identify the impact, if any, on the financial statements if you failed to make the appropriate AJE. Indicate NE for no impact, U for understatement, and O for overstatement. Use the following format to indicate the impact of failing to make the required entry for each situation.

Assets                Liabilities Expenses            Revenues          Net Income        Owners’ Equity

XX                     XX            XX            XX            XX            XX           

    1. On April 1, 2015, the firm collected $12,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to a balance sheet account.
    1. On July 1, 2015, the firm collected $12,000 of rent for 12 months in advance. The journal entry to record the receipt included a credit to an income statement account.
    1. On March 31, 2015, the firm collected $3,000 of rent for 3 months in advance. The journal entry to record the receipt included a credit to a temporary account.
    1. On February 1, 2015, the firm collected $5,000 of rent for 5 months in advance. The journal entry to record the receipt included a credit to a permanent account.
    1. On March 1, 2015, the firm paid $6,000 for a 6-month insurance policy. The journal entry to record the payment included a debit to a temporary account.
    1. On September 30, 2015, the firm paid $6,000 for a 6-month rental of a machine. The journal entry to record the payment included a debit to a balance sheet account.
    1. On April 1, 2015, the firm paid $6,000 for a 6-month rental of a machine. The journal entry to record the payment included a debit to an income statement account.
    1. On October 31, 2015, the firm paid $5,000 for a 5-month rental of a machine. The journal entry to record the payment included a debit to a permanent account.
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