21. Prepare general journal entries on December 31 to record the following unrelated year-end adjustments. No explanations are needed. (30 points) a. Estimated depreciation on equipment for the year, $4,500. b. The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of insurance policies shows $3080 of unexpired insurance. c. The Prepaid Rent account has a $2,400 debit balance before adjustment (4 months of rent). One month of rent has been used. d. The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26, and have worked full days on Monday, Tuesday, and Wednesday, December 29, 30, and 31. e. On November 1, the company received 6 months' rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account. f. The company collects rent monthly from its tenants. One tenant whose rent is $1,000 per month has not paid his rent for December.

Journal Entries:

a. Debit Depreciation Expense $4,500

Credit Accumulated Depreciation $4,500

To record depreciation expense for the year.

b. Debit Insurance Expense $600

Credit Prepaid Insurance $600

To record expired insurance expense.

c. Debit Rent Expense $600

Credit Prepaid Rent $600

To record used rent expense.

d. Debit Wages Expense $900

Credit Wages Payable $900

To accrue wages unpaid.

e. Debit Unearned Rent $1,400

Credit Rent Revenue $1,400

To record earned rent revenue for November and December.

f. Debit Rent Receivable $1,000

Credit Rent Revenue $1,000

To record rent revenue due.

Explanation:

1) Data and Analysis:

a. Depreciation Expense $4,500 Accumulated Depreciation $4,500

b. Insurance Expense $600 Prepaid Insurance $600 ($3,680 - $3,080)

c. Rent Expense $600 Prepaid Rent $600 ($2,400/4)

d. Wages Expense $900 Wages Payable $900 ($100*3*3)

e. Unearned Rent $1,400 Rent Revenue $1,400 ($700 * 2 for Nov. and Dec.)

f. Rent Receivable $1,000 Rent Revenue $1,000

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.

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