All of the current year's entries for zimmerman company have been made, except the following adjusting entries. the company's annual accounting year ends on december 31. on september 1 of the current year, zimmerman collected six months' rent of $9,600 on storage space. at that date, zimmerman debited cash and credited unearned rent revenue for $9,600. on october 1 of the current year, the company borrowed $18,000 from a local bank and signed a one-year, 12 percent note for that amount. the principal and interest are payable on the maturity date. depreciation of $3,500 must be recognized on a service truck purchased in july of the current year at a cost of $22,000.

prepaid rent 6,400 debit

      rent revenue     6,400 credit

--to record accrued rent revenue--

interest expense      540 debit

      interest payable                540 credit

--to record accrued interest on the note--

depreciation expense 3,500 debit

  accumulated depreciation-truck     3,500 credit

--to record the depreciation on company's truck--

Explanation:

earned rent:

9,600 for six months: 9,600 / 6 = 1,600 dollars per month

months from September 1st to December 31th: 4 months

earned rent revenue: 1,600 x 4 = 6,400 dollars

interest acrued on the note:

principal x rate x time

18,000 x 0.12 x 3/12 = 540

we ddebit the expense and credit the payable

depreciation:

for the amount stated we debit the expense and credit the accumulated depreciation

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