P3-2 Adjustment process Adjustment data for Oasis Health Care Inc. for January a

Question

P3-2 Adjustment process Adjustment data for Oasis Health Care Inc. for January are as follows: 1. Insurance expired, $800. 2. Supplies on hand on January 31, $1,100. 3. Depreciation on building, $2,000. 4. Unearned rent revenue earned, $2,500. 5. Wages owed employees but not paid, $1,700. 6. Services provided but not billed to patients, $10,000. Instructions Based on the transactions recorded in January for Problem 3-1, record the adjustments for January using the integrated financial statement framework

Explanation / Answer

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I will help you out with the journal entries for these adjusting transactions !!

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Journal Entries Date Accounts and Explanation Debit ($) Credit ($) 1 Insurance Expense A/c Dr           800 To Prepaid Insurance A/c Cr             800 (being insurance expense booked ) 2 Supplies Expense Dr To Supplies A/c Cr (Please note that to find the amount for Supplies expense, you will have to refer Problem 3-1 as the same is not available in this question. From the supplies stock given in Prob 3-1, deduct closing supply of 1000 to find the Supply expense) 3 Depreciation A/c Dr        2,000 Accumulate Dep A/c - Buildings Cr         2,000 (being depreciation charged to accumulated depreciation account.
Note: Building A/c may be credited if Acc Dep A/c is not maintained, you will have to refer Problem 3-1 to check the same) 4 Unearned Rent Revenue Dr        2,500 Rent Revenue A/c Cr         2,500 (Being unearned rent revenue earned) 5 Wages A/c Dr        1,700 To Wages Payable A/c Cr         1,700 6 Account Receivable Dr     10,000 Unearned Revenue A/c Cr       10,000 (Services provided but not billed)

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