Response to the following problem:
Reversing Entries
On December 31, 2010, Cochran Company made the following proper year-end adjusting entries:
|
Date
|
Account Titles
|
Debit
|
Credit
|
|
Dec. 31
|
Bad Debts Expense
|
530
|
|
|
|
Allowance lot Doubtful Account
|
|
530
|
|
31
|
Salaries Expense
|
940
|
|
|
|
Salaries Payable
|
|
940
|
|
31
|
Unearned Rent
|
1,230
|
|
|
|
Rent Revenue
|
|
1,230
|
|
31
|
Interest Expense
|
220
|
|
|
|
Interest Payable (due July 1. 2011)
|
|
220
|
|
31
|
Rent Receivable
|
310
|
|
|
|
Rent Revenue
|
|
110
|
|
31
|
Depreciation Expense
|
5,100
|
|
|
|
Accumulated Depreciation
|
|
5,100
|
|
31
|
Insurance Expense
|
312
|
|
|
|
Prepaid Insurance
|
|
312
|
|
31
|
Interest Receivable (due February 1, 2012)
|
225
|
|
|
|
Interest Revenue
|
|
125
|
|
31
|
Office Supplies
|
100
|
|
|
|
Office Supplies Expense
|
|
100
|
31
|
Advances to Salespersons
|
100
|
|
|
|
Salaries Expense
|
|
300
|
|
31
|
Income Tax Expense
|
4,300
|
|
|
|
Income Tax Payable
|
|
4,300
|
Required
1. Prepare journal entries to record whatever reversing entries you think are appropriate.
2. Explain your reasoning for each reversing entry