Depreciation on the company\'s equipment for 2013is computed to be$15,000 The pr

Question

Depreciation on the company's equipment for 2013is computed to be$15,000 The prepaid insurance account had $8,000 debit balance at December 31, 2013,before adjusting for the costs. Of any expired coverage An analysis of the. companys. insurance policies showed that $1,070 of unexpired insurance coverage remains. The Office Supplies account had a $510 debit balance on December 31, 2012, and $2,680 of office supplies were purchased during the year The December 31, 2013, physical count showed $602 of supplies available. One that of the work related $15,000 of cash received in advance was performed this period The Prepaid Insurance account had a $5,700debit balance    at December 31, 2013before adjusting for  the costs of any expired coverage An analysis of insurance policies showed that $4,630 of coverage had expired Wage expenses of $5,000 have been incurred but are not paid as of December 31. ?013 Prepare adjusting journal entries for the year ended (dale of) December 31. 2013. For each of these separate situations Assume that prepaid expenses are initially recorded in asset accounts Also assume that fees collected in advance of work are initially recorded as liabilities.

Explanation / Answer

a- depreciation debit 15000

   credit equipment                    15000

(b)prepaid insurance debit 1070

    credit unexpired coverage or cash                     1070

(c) office supplies issues debit

      credit inventory of office supplies

(d) unearned income debit   7500

     credit work performed                   7500

(e) insurance coverage debit 4630

    credit prepaid insurance                   4630

(f)Wages expense   debit   5000

   credit outstanding wages         5000

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