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Accrued Revenue and Expenses: Analyzing, Posting, and Reversing Entries

Learn how to analyze, post, and reverse adjusting entries for accrued revenue and expenses. Also, discover the process of collecting a note receivable and paying a note payable.

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Accrued Revenue and Expenses: Analyzing, Posting, and Reversing Entries

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  1. LESSON 21-1 Accrued Revenue

  2. 3 ANALYZING AN ADJUSTMENT FOR ACCRUED INTEREST INCOME page 617 1 2 1. Debit Interest Receivable. 2. Credit Interest Income. 3. Record the adjusting entry. LESSON 21-1

  3. 1 2 POSTING AN ADJUSTING ENTRY FOR ACCRUED INTEREST INCOME page 618 1. Post the debit. 2. Post the credit. LESSON 21-1

  4. REVERSING ENTRY FOR ACCRUED INTEREST INCOME page 619 1 2 3 1. Write the heading. 2. Debit Interest Income. 3. Credit Interest Receivable. LESSON 21-1

  5. 4 4 COLLECTING A NOTE RECEIVABLE ISSUED IN A PREVIOUS FISCAL PERIOD page 620 January 30. Received cash for the maturity value of a 90-day, 6% note: principal, $2,000.00, plus interest, $30.00; total, $2,030.00. Receipt No. 9. 1 3 2 1. Credit for the principal of the note. 2. Credit for the total interest. 3. Debit for the maturity value. 4. Post the amounts in the General columns. LESSON 21-1

  6. TERMS REVIEW page 621 • accrued revenue • intellectual property • accrued interest income • reversing entry LESSON 21-1

  7. LESSON 21-2 Accrued Expenses

  8. 3 ANALYZING AN ADJUSTMENT FOR ACCRUED INTEREST EXPENSE page 622 2 1 1. Debit Interest Expense. 2. Credit Interest Payable. 3. Record the adjusting entry. LESSON 21-2

  9. 2 1 POSTING AN ADJUSTING ENTRY FOR ACCRUED INTEREST EXPENSE page 623 1. Post the debit. 2. Post the credit. LESSON 21-2

  10. REVERSING ENTRY FOR ACCRUED INTEREST EXPENSE page 624 1 2 1. Debit Interest Payable. 2. Credit Interest Expense. LESSON 21-2

  11. 4 4 PAYING A NOTE PAYABLE SIGNED IN A PREVIOUS FISCAL PERIOD page 625 March 1. Paid cash for maturity value of the September 2 note: principal, $10,000.00, plus interest, $600.00; total, $10,600.00. Check No. 916. 1 3 2 1. Debit for the principal of the note. 2. Debit for the total interest. 3. Credit for the maturity value of the note. 4. Post the amounts in the General columns. LESSON 21-2

  12. TERMS REVIEW page 627 • accrued expenses • accrued interest expense LESSON 21-2

  13. Adjusting, Closing, and Reversing Entries • Adjusting Entries • Last day of fiscal period • December 31 • Closing Entries • Last day of fiscal period • December 31 • Reversing Entries • First day of new fiscal period • January 1 LESSON 21-1

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