I\'m a little stuck here. If anyone can help it would be appreciated. These are

Question

I'm a little stuck here. If anyone can help it would be appreciated.

These are the adjusting entry's. Already finished the general journal for the month.

So when looking at equipment and depreciation, the july 1 purchase was 93,000.

93,000/5 years= 18,600 depreciation a year

18600/12= 3,720 depreciation a month.

Therefor, for the month of july on this equipment, would I record it like so? I think this is wrong :

Supplies CREDIT 3720

Depreciation Expense Debit 3720 OR Accumulated depreciation DEBIT 3720

Which depreciation do I debit? I obviously don't do both, I just don't know which one to use.

For supplies: I wouldn't do anything here, that's just a balance at the end with no changes.

Mowing Service at the university: How do I record this? The contract is for four months, $8000 a month, $32,000 total. How do I enter this all as an adjustment into the journal? Since the contact was signed on April 1, 2015, and it was an advance payment, the cash would have been paid up front, debiting cash, crediting unearned revenue. So Therefor would I debit service revenue and credit unearned revenue 32000?

Additional Information Equipment: The $48,000.00 beginning balance in the Equipment account relates to the mowing equipment which was purchased on January 2, 2014. For information related to this mowing equipment see Page 70 in the Solid Footing book. This equipment continues to be used and should be depreciated for the month of July. The following information relates to the new equipment which was purchased on July 1, 2015: The new equipment was placed into service on July 1, 2015 and should be depreciated for the month of July. -The estimated useful life of the new equipment is 5 years. At the end of 5 years, the new equipment will have no future value and will be scrapped The new equipment will be depreciated using the straight-line method. Supplies: At the end of July there are $25,450.00 supplies on-hand. Mowing Service at the University: The monthly mowing service was provided to the university per the contract signed on April 1, 2015. For information on the contract with the university and the related advance payment, see Pages 95 and 98 in the Solid Footing book. Wages Due the Employees: The last wage payment was made to the employees on July 28, 2015. The employees worked on July 29, 30, and 31. For these three days of work the employees earned $4,000.00 of wages. These three days of wages will be paid to the workers during the first week of August. Bank Loan: Bank Loan The interest on the loan from 1st Bank will be paid every three months. The first interest payment The to the bank will be made on September 30, 2015. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $340.00

Explanation / Answer

1. Straight line depreciation = 93,000/5 = $18,600 per year
   Depreciation for the month of july = $18,600/12 = $1550

Journal would be
   Depreciation Expense $1,550
Accumulated depreciation Equipment $1,550

2. for supplies it would be (balance as per trial balance less the closing balance)
   Supplies expense Debit and Supplies Credit with the amount calculated as above   

3. As from april 1,2015 to 31 july 2015 4 months have completed so now the unearned revenue will be transferred to service revenue for the 4 months for which contract was signed
   Unearned service revenue $32,000
   Service revenue $32,000

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