Question

Prepaid Maintenance $6,000 Commission Fees Earned $97,000 Supplies 10,400 Rent Expense 10,800 Unearned Commission Fees 10,700...

Prepaid Maintenance $6,000 Commission Fees Earned $97,000
Supplies 10,400 Rent Expense 10,800
Unearned Commission Fees 10,700

Required
Prepare the necessary adjusting entries in the general journal as of December 31, assuming the following:

Could you please help me figure out what the rent expense/rent payable amount should be?

  1. On September 1, the company entered into a prepaid equipment maintenance contract. Burns Company paid $6,000 to cover maintenance service for six months, beginning September 1. The $6,000 payment was debited to Prepaid Maintenance.
  2. Supplies on hand at December 31 are $3,500.
  3. Unearned commission fees at December 31 are $5,000.
  4. Commission fees earned but not yet billed at December 31 are $3,800.
    (Note: Debit Fees Receivable.)
  5. Burns Company's lease calls for rent of $900 per month payable on the first of each month, plus an annual amount equal to 2% of annual commissions earned. This additional rent is payable on January 10 of the following year.
    (Note: Be sure to use the adjusted amount of commissions earned in computing the additional rent.)
Business   Accounting   
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Answer #1
1 Maintenance expense 4000 =6000/6*4
       Prepaid Maintenance 4000
2 Supplies expense 6900 =10400-3500
        Supplies 6900
3 Unearned Commission Fees 5700 =10700-5000
       Commission Fees Earned 5700
4 Fees Receivable 3800
       Commission Fees Earned 3800
5 Rent expense 2130 =(97000+5700+3800)*2%
        Rent payable 2130
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