E4-20 Identifying and journalizing closing entries [15 min]
Gunther recorded the following transactions and year-end adjustments during 2012:
| Journal Entry | Debit | Credit | |||
| Prepaid rent | 8000 | ||||
| Cash | 8000 | ||||
| Prepaid the annual rent. | |||||
| Accounts and Explanations | |||||
| Rent expense | 5100 | ||||
| Prepaid rent | 5100 | ||||
| Adjustment to record rent expense for the year. | |||||
| Cash | 4200 | ||||
| Unearned service revenue | 4200 | ||||
| Collected cash in advance of service revenue to be earned. | |||||
| Unearned service revenue | 4700 | ||||
| Service revenue | 4700 | ||||
| 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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