Question

For each of the following journal entries 1through 12,enter the letter of the explanation that most closely

describes it in the space beside each entry. (You can use letters more than once.)

A. To record receipt of unearned revenue.

B. To record this period’s earning of prior

unearned revenue.

C. To record payment of an accrued expense.

D. To record receipt of an accrued revenue.

E. To record an accrued expense.

F. To record an accrued revenue.

G. To record this period’s use of a prepaid expense.

H.. To record payment of a prepaid expense

I. To record this period’s depreciation expense To record payment of a prepaid expense

1. Interest Expense . 1,000

Interest Payable . 1,000

______ 2. Depreciation Expense 4,000

Accumulated Depreciation . 4,000

______ 3. Unearned Professional Fees 3,000

Professional Fees Earned . 3,000

______ 4. Insurance Expense . 4,200

Prepaid Insurance . 4,200

______ 5. Salaries Payable . 1,400

Cash . 1,400

______ 6. Prepaid Rent . 4,500

Cash . 4,500

______ 7. Salaries Expense 6,000

Salaries Payable 6,000

______ 8. Interest Receivable . 5,000

Interest Revenue . 5,000

______ 9. Cash 9,000

Accounts Receivable (from consulting) 9,000

______ 10. Cash 7,500

Unearned Professional Fees . . . . . . . . . . . . . . . . . . . . . . . . 7,500

______ 11. Cash 2,000

Interest Receivable 2,000

______ 12. Rent Expense 2,000

Prepaid Rent 2,000

Short answer

Correct answer is E, I, B, G, C, H, E, F, D, A, D and G.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of accrued expenses

Accrued expenses are those expenses that are due to but not paid.

Correct statement

1. E: To record an accrued expense.
2. I: To record this period’s depreciation expense
3. B: To record this period’s earnings of prior unearned revenue.
4. G: To record this period’s use of a prepaid expense
5. C: To record payment of an accrued expense
6. H: To record payment of a prepaid expense
7. E: To record an accrued expense.
8. F: To record an accrued revenue.
9. D: To record receipt of an accrued revenue
10. A: To record receipt of unearned revenue
11. D: To record receipt of an accrued revenue
12. G: To record this period’s use of a prepaid expense