Homework SourseOn December 1 2012 Jenna Company paid three months rent for
On December 1, 2012, Jenna Company paid three months\' rent for office space for December 2012, January 2013 and February 2013 totaling $21,000. The payment was originally recorded by a debit to a real account. Jenna\'s required adjusting entry at December 31, 2012 would include:
a debit to Rent Payable.
a debit to Prepaid Rent.
a credit to Rent Payable.
a debit to Rent Expense.
none of the above
Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in January 2013. No adjustment was made for this item on December 31, 2012. As a result of this error:
Liabilities at December 31, 2012 are overstated.
Owner\'s equity at December 31, 2012 is understated.
Assets at December 31, 2012 are overstated.
2012 net income is overstated.
None of the above.
On December 1, 2012, Jenna Company paid three months\' rent for office space for December 2012, January 2013 and February 2013 totaling $21,000. The payment was originally recorded by a debit to a real account. Jenna\'s required adjusting entry at December 31, 2012 would include:
a debit to Rent Payable.
a debit to Prepaid Rent.
a credit to Rent Payable.
a debit to Rent Expense.
none of the above
Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in January 2013. No adjustment was made for this item on December 31, 2012. As a result of this error:
Liabilities at December 31, 2012 are overstated.
Owner\'s equity at December 31, 2012 is understated.
Assets at December 31, 2012 are overstated.
2012 net income is overstated.
None of the above.
On December 1, 2012, Jenna Company paid three months\' rent for office space for December 2012, January 2013 and February 2013 totaling $21,000. The payment was originally recorded by a debit to a real account. Jenna\'s required adjusting entry at December 31, 2012 would include:
a debit to Rent Payable.
a debit to Prepaid Rent.
a credit to Rent Payable.
a debit to Rent Expense.
none of the above
Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in January 2013. No adjustment was made for this item on December 31, 2012. As a result of this error:
Liabilities at December 31, 2012 are overstated.
Owner\'s equity at December 31, 2012 is understated.
Assets at December 31, 2012 are overstated.
2012 net income is overstated.
None of the above.
Employees are owed $1,700 for services earned but not yet paid on December 31, 2012. These wages will be paid to employees in the first payday in January 2013. No adjustment was made for this item on December 31, 2012. As a result of this error:
Liabilities at December 31, 2012 are overstated.
Owner\'s equity at December 31, 2012 is understated.
Assets at December 31, 2012 are overstated.
2012 net income is overstated.
None of the above.
Solution
1 Total amount paid is recorded in a real account. So for adjusting the rent for Dec, 2012 The company will be required to transfer one month rent from prepaid rent to expense accounts as follows: Rent Expense Account Dr. 7000 To Prepaid Expense Account 7000 Answer will be Debit to Rent Expense Account 2 Due to non booking of expense relating to a particular period would overstate the income. If proper recording is required for this transaction; following transaction is required: Salaries & Wages Account Dr. 1700 To S&W Payable Account 1700 Income is not charged with this expense hence it is overstated Answer is 2012 net income is overstated
