The following errors took place in journalizing and posting transactions:
a. Rent expense of $4,650 paid for the current month was recorded as a debit to Miscellaneous Expense and a credit to Rent Expense.
b. The payment of $3,700 from a customer on account was recorded as a debit to Cash and a credit to Accounts Payable.
Journalize the entries to correct the errors. Omit explanations.
Answer:
a.
Rent Expense 4,650
Miscellaneous Expense 4,650
Rent Expense 4,650
Cash 4,650
Note: The first entry in (a) reverses the incorrect entry, and the second entry records the correct entry. These two entries could also be combined into one entry as shown below; however, preparing two entries would make it easier for someone to understand later what happened and why the entries were necessary.
Rent Expense 9,300
Miscellaneous Expense 4,650
Cash 4,650
b.
Accounts Payable 3,700
Accounts Receivable 3,700