1. Adjusting Entries Acct 202 Chapter 3 - Day 1

2. Deferred Expenses Paid two years’ rent in advance, $24,000 Prepaid Rent $24,000 Rent Expense for 1 month-1,000 Prepaid Rent (after adjustment)$23,000 1/31/2005 Rent Expense $1,000 Prepaid Rent $1,000 To record rent expense for the month

3. Jan. 311,000 Prepaid Rent Bal. 24,000 Rent Expense 1,000 1/31/2009 Rent Expense $1,000 Prepaid Rent $1,000 To record rent expense for the month 23,000

4. Jan. 311,000 Prepaid Rent Bal. 24,000 Rent Expense 1,000 1/31/2009 Rent Expense $1,000 Prepaid Rent $1,000 To record rent expense for the month 23,000

5. Deferred Revenues Received six months’ service subscription in advance, $3,000 Unearned Revenue $3,000 Services provided this month-400 Unearned Revenue (after adjustment)$2,600 1/31/2009 Unearned Revenue $400 Service Revenue $400 To record revenues earned this month

6. Bal. $3,000 Jan. 31$400 Unearned Revenue Jan. 31 $400 Service Revenue $400 1/31/2009 Unearned Revenue $400 Service Revenue $400 To record revenues earned this month $2,600

7. Bal. $3,000 Jan. 31$400 Unearned Revenue Jan. 31 $400 Service Revenue $400 1/31/2009 Unearned Revenue $400 Service Revenue $400 To record revenues earned this month $2,600

8. Accrued Expenses Accrued income tax expense for the quarter, $4,500 3/31/2009 Income Tax Expense $4,500 Income Taxes Payable $4,500 To record tax expense for Q1 2009

9. Income Tax Expense 3/31 $4,500 Income Taxes Payable 3/31/2009 Income Tax Expense $4,500 Income Taxes Payable $4,500 To record tax expense for Q1 2009 $4,500 3/31 $4,500 $4,500

10. Income Tax Expense 3/31 $4,500 Income Taxes Payable 3/31/2009 Income Tax Expense $4,500 Income Taxes Payable $4,500 To record tax expense for Q1 2009 $4,500 3/31 $4,500 $4,500

11. Accrued Revenues Accrued quarterly dividend income from investments, $800 9/30/2009 Dividends Receivable $800 Dividend Income $800 To record dividends earned for Q3 2009

12. Dividends Receivable 9/30 $800 Dividend Income 9/30/2009 Dividends Receivable $800 Dividend Income $800 To record dividends earned for Q3 2009 $800 9/30 $800 $800

13. Dividends Receivable 9/30 $800 Dividend Income 9/30/2009 Dividends Receivable $800 Dividend Income $800 To record dividends earned for Q3 2009 $800 9/30 $800 $800

14. Summary Deferrals Expenses: cash is paid before the expense is fully recognized Revenues: cash is received before the revenue is fully earned Accruals Expenses: cash is paid after the expense is recognized Revenues: cash is received after the revenue is earned