Chapter 10
Q. 10.2
The following transactions were registered during the year 20X8:
• Subscriptions of journals paid in 20X8 of 7000 lei, of which paid in advance for January, 20X9 of 1000 lei;
• Subsidies received from the Government: 10,000 lei, of which 30% apply to the year 20X9;
• Rent received in 20X8 in the amount of 20,000 lei, of which rent of 2500 lei was received in advance for January, 20X9.
Provide the journal entries.
Step-by-Step
Verified Solution
The journal entries are the following:
a) The subscription paid in advance:
7000 lei % = Account Payables 7000 lei 6000 lei Expenses with subscriptions
1000 lei Prepaid expenses
b) Subsidies received from the Government:
10,000 lei Bank account = % 10,000 lei
Revenues from subsidies 7000 lei
Deferred income 3000 lei
c) Rent received
20,000 lei Bank account = % 20,000 lei
Revenues from rent 17,500 lei
Deferred income 2500 lei
The extracts from the Income Statement and the Statement of Financial Position are presented in Table 10.2.
Table 10.2 Extract from the Financial Statements
| Income statement | Lei |
| Revenues from subsidies | 7000 |
| Revenues from rent | 17,500 |
| Expenses with subscriptions | (6000) |
| Statement of financial position | Lei |
| Current assets | |
| Prepayments | 1000 |
| Current liabilities | |
| Accruals and deferred income | 5500 |