Exercise 4-9 The ledger of Beckett Rental Agency on March 31 of the current year

Question

Exercise 4-9 The ledger of Beckett Rental Agency on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared. Debit Credit Supplies $ 3,370 Prepaid Insurance 3,870 Equipment 29,400 Accumulated Depreciation—Equipment $ 8,820 Notes Payable 18,100 Unearned Rent Revenue 11,180 Rent Revenue 64,400 Interest Expense 0 Salaries and Wages Expense 13,600 An analysis of the accounts shows the following. 1. The equipment depreciates $300 per month. 2. Half of the unearned rent revenue was earned during the quarter. 3. Interest of $370 is accrued on the notes payable. 4. Supplies on hand total $880. 5. Insurance expires at the rate of $430 per month. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Explanation / Answer

Adjustment Account Titles Debit Credit $ $ 1. Depreciation expense 900 Accumulated depreciation 900 2. Unearned rent revenue 5,590 Rent revenue 5,590 3. Interest expense 370 Interest payable 370 4. Supplies expense 2,490 Supplies 2,490 5. Insurance expense 1,290 Prepaid Insurance 1,290

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