I'm having a little trouble with my HS AP Accounting class. If you could please verify where I am wrong I would appreciate it. Thank You, Kylee

Adjusting entries for fiscal year ending 8/31/2011

Rent is paid yearly (Jan 1) of $72,000
My adjusting entry would be:

Rent expense $48,000 (Debit)
Cash $48,000 (Credit)

Equipment $200,000
Accumulated depreciation- equipment $52,000
Depreciation on equipment $5,000

My adjusting entry would be:
Depreciation expense $5,000 (debit)
Accumulated depreciation $5,000 (credit)


Thank you!

Your rent expense journal entry should be a Credit to Prepaid Rent. The rest of the entry is correct.

Your depreciation looks correct, but not sure on the amount because with what is listed I am not sure if $5,000 is the annual amount or the amount of depreciation for 8 months.

Thank you! I'm assuming that is the depreciation amount for the fiscal year ending of Aug 31. (years end)

These are my adjusted entries

Can I credit prepaid rent if the prepaid rent is $0 on the trial balance?

Do I credit for expense paid or the amount remaining?

The answer is yes to both questions. In my accounting classes sometimes the original journal entry would be to expense everything when paid. In this case you would have to credit an expense and debit a prepaid account like rent or insurance to get the amounts paid but not used into the correct accounts.