EXERCISE 5

Dec. 31
a. Interest Receivable 25.33
Interest Income 25.33
To record receivable from customers

b. Interest Expense 1,875

Interest Payable 1,875
To record interest due to BPI

c. Lease Income 566,666.67

Unearned Lease Income 566,666.67
To record for the unearned lease income

d. Insurance Expense 4,000

Prepaid Insurance 4,000
To record the expired insurance

e. Merchandise Inventory, ending 90,000

Income Summary 90,000
To record goods on hand
EXERCISE 6
a.
Dec. 31 Rent Expense 15,000
Rent Payable 15,000
b. RENT EXPENSE
Dec-31 15,000

RENT PAYABLE
Dec-31 15,000

c.
Jan. 5 Rent Payable 15,000
Cash 15,000
d. RENT EXPENSE
Dec. 31 15,000

RENT PAYABLE
Jan. 5 15,000 Dec. 31 15,000

CASH
Jan. 5 15,000

e. The rent expense in the income statement and the accrued rent in the statement
of financial position will now be zero (0) or non