1.Accrued Liability: Dr: Accrued expense
Cr: Accrued liability
2. Accrued Revenue: Dr: A/R
Cr: Accrued revenue
3. Deferred charges: Dr: Deferred charge
Cr: Cash/asset
*stays on B/S for now;
4. Deferred credits: Dr: Cash
Cr: Unearned / deferred
revenue
*stays on B/S for now;
5. Earned royalties: Dr: Unearned royalties
Cr: Earned royalties
*I/S impact
6. J/E to record Large Stock
Dividend at Par:
Journal entry to record
declaration:
Dr: Retained earnings
$4,000,000
Cr: Common Stock
$4,000,000
Journal entry to record the
distribution:
Dr: Common stock distributable
$4,000,000
Cr: Capital stock, $10 par
common $4,000,000
7. J/E to record Small Stock
Dividend at FMV:
Dr: Retained earnings FMV (5,000 x 15) $75,000
Cr: Common Stock (5,000 x10 par) $50,000
Cr: Paid in capital (75-50) $25,000
8. J/E to record stock options: 1. No entry at the grant date
2. To accrue expense: X 2
Year 1 and Year 2
Dr: Compensation expense $25,000
Cr: APIC – stock options $25,000
3. When exercised:
Dr: Cash (10,000 x 25) $250,000
Dr: APIC – stock options $50,000
Cr: Common Stock (10,000 x 5) $50,000
Cr: APIC – $250,000
9. Prepaid Expenses: Dr: Prepaid expense
Cr: Cash
*stays on B/S for now;
10. Unearned royalties if cash
rec'd in advance:
Dr: Cash
Cr: Unearned royalties
*B/S impact only;
Keep in mind
A)Losses/expenses/Asset acquired always debited
B)profit/Income/Liabilities/asset going out e.g Cash ) always credited
for AJE , first understand the executed ( actual entries ) and then just reverse the entries to correct the mistake or error.
You don't need to remember all JE for Audit.In AUD SIM they ask simple adjustment.
WannaB