Exercise 3 TouchBase Inc shows the following movements in it

Exercise 3 TouchBase Inc. shows the following movements in its ledger book at the end of the 2017: Maintenance expense Prepaid rent 22,200 22,200 Apr-01 60,000 45,000 Dec-31 Mar-7 11,500 Dec-31 5,000 Jan-01 Oct-01 Accrued maintenance. expense Rent expense 6,000 Feb-01 5,000 Dec-31 Apr-01 22,200 Dec-31 45,000 Jan-01 6,000 ptese provicle all nuusary jouwnals that expla in the amourds in dhe T account ghown cabore

Solution

Jan 01 prepaid expense. A/c. Dr. 22,200

To bank. A/c. 22,200

(Being rent paid in advance)

April 01 Rent expense A/c. Dr 22,200

To prepaid rent. 22,200

( Being rent expense recognized)

Oct 01. Prepaid rent. A/c. Dr. 60,000

To banka/c. 60,000

Dec. 31. Rent expense. A/c. Dr. 45,000

To prepaid rent a/c. 45,000

Maintenance

Jan 01. Accrued maintenance here is the opening balance and the amount of 6000 is already taken has expense.. here the question is slightly wrong has jan 01 is shown has debit balance on debit side. However, the question should be the credit side feb 01 has jan 01 and vice versa..

Feb. 01. Accrued maintenance expense. A/c. Dr. 6,000

To banka/c. 6,000

Dec. 31. Maintenance expense. A/c. Dr 11,500

To bank a/c. 11,500

  

Dec 31. Maintenance expense a/c. Dr. 5,000

To accrued maintenance expense. 5,000