Identifying and journalizing closing entries
Gunther recorded the following transactions and year-end adjustments during 2012:
Journal Entry
Accounts and Explanations
Debit
Credit
Prepaid rent
8,000
Cash
8,000
Prepaid the annual rent.
Rent expense
5,100
Prepaid rent
5,100
Adjustment to record rent expense for the year.
Cash
4,200
Unearned service revenue
4,200
Collected cash in advance of service revenue to be earned.
Unearned service revenue
4,700
Service revenue
4,700
Adjustment to record revenue earned.
Requirements
1. Assuming that there were no other service revenue and rent expense transactions during 2012, journalize Gunther’s closing entries at the end of 2012.
2. Open T-accounts for Service revenue and Rent expense. Post the closing entries to these accounts. What are their balances after closing?
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