Adjusting Entries For each of the following unrelated situations, prepare the ne

Question

Adjusting Entries For each of the following unrelated situations, prepare the necessary adjusting entry in general journal form a. Unrecorded depreciation on equipment is $1,110 b. The Supplies account has a balance of $3,490. Supplies on hand at the end of the period totaled $1,600 c. On the date for preparing financial statements, an estimated utilities expense of $890 has been incurred, but no utility bill has been received. Use the Utilities Payable account. d. On the first day of the current month, rent for four months was paid and recorded as a $3,300 debit to Rent and a $3.300 credit to Cash. Monthly statements are now being prepared. Record Rent Expense for current e. Nine months ago, Solid Insurance Company sold a one-year pollcy to a customer and recorded the receipt of the premium by debiting Cash for $1,124 and crediting Unearned Premium Revenue $1,124. No adjusting entries have been prepared during the nine-month perlod. Annual financial statements are now being prepared f. At the end of the accounting period, employee wages of $1,465 have been incurred but not paid g. At the end of the accounting period,$800 of interest has been earned but not yet received on notes receivable that are held. Debit To record depreciation expense 9 5 6 F G

Explanation / Answer

Answer: General Journal Description Debit Credit As depreciation is an expense, it would be accounted by debiting depreciation expense and crediting accumulated Depreciation. a Depreciation-Equipment 1110 Accumulated Depreciation-Equipment 1110 (To record depreciation expense) The difference between supplies at the end of the period and at the beginning of the period would be supplies expense. It would be accounted debiting supplies expenses and crediting supplies. b Supplies expense 1890 (3,490-1,600) Supplies 1890 (To record supplies expense) Utilities expenses incurred but not paid would be accounted by debiting utilities expenses and crediting utilities payable account. c Utilities expenses 890 Utilities Payable account 890 (To record accruded utilities expense) Rent expenses for the month would be recorded by debiting Rent expenses and crediting Prepaid rent d Rent expenses 825 (3300/4) Prepaid rent 825 (To record rent expense for the month) As premium is received in advance, Premium Revenue earned for 9 months would be recorded by debiting Unearned Premium revenue and crediting Premium revenue. e Unearned Premium Revenue 843 ($1,124*9/12) Premium Revenue 843 (To record premium revenue earned) Employee wages incurred but not paid would be recorded by debiting Wages expense and crediting Wages payable f Wages expense 1465 Wages payable 1465 (To record accruded wages at the end of the period) As interest is earned but not yet received we will debit interest receivable and credit Interest Income. g Interest Receivable 800 Interest Income 800 (To accrue interest earned but not yet received)

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