Reference no: EM132090279

Question: Recording Adjusting Journal Entries Jordan Company's annual accounting year ends on December 31. Jordan Broome owns and manages the company. It is now December 31, 2009, and all of the 2009 entries have been made except for the following:

a. The company owes interest of $400 on a bank loan taken out on October 1, 2009. The interest will be paid when the loan is repaid on September 30, 2010.

b. On September 1, 2009, Jordan collected six months' rent of $4,800 on storage space. At that date, Jordan debited Cash and credited Unearned Rent Revenue for $4,800.

c. The company earned service revenue of $3,000 on a special job completed December 29, 2009. Collection will be made during January 2010. No entry has been recorded.

d. On November 1, 2009, Jordan paid a $4,200, one-year premium for property insurance for coverage starting on that date. Prepaid Insurance was debited and Cash was credited for this amount.

e. At December 31, 2009, wages earned by employees totaled $1,100. The employees will be paid on the next payroll date, January 15, 2010.

f. Depreciation of $1,000 must be recognized on a service truck purchased this year.

g. On December 27, 2009, the company received a tax bill of $400 from the city for 2009 property taxes on land. The tax bill is payable during January 2010.

Required: Following the steps outlined in the chapter, for each transaction:

1. Identify the type of adjustment (unearned revenue, accrued revenue, prepaid expense, or accrued expense).

2. Determine the amount of revenue or expense to be recorded.

3. Record the adjusting journal entry at December 31, 2009.