Weygandt, Accounting Principles, 12e Principles of Accounting 12e (ACo Gradebook

Question

Weygandt, Accounting Principles, 12e Principles of Accounting 12e (ACo Gradebook ORION Downloadable eTextbook signment Exercise 3-7 The ledger of Passehl Rental Agency on March 31 of the current year incdludes the selected accounts, shown below, before adjusting entries have been prepared Debit Credit Prepaid Insurance $14,400 3,600 18,750 dy Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Rent Revenue 8,300 25,000 10,800 Interest Expense Salaries and wages Expense 4,000 An analysis of the accounts shows the following 1. The equipment depreciates 300 per mont. 2 One-third of the uneamed rent revenue was earned during the cuarter 3. Interest of $625 is accrued on the notes payable. 4. Supplies on hand total 5670 5. Insurance expires at the rate of $800 per month, that adjusting entries are made quarterly. Additional accounts ane: Depreciation Experse, Insurance Expense Prepare the adjusting entries at March 31, assuming Interest Pa is entered De not indent manuaily and Supplies Expense. (Credit account titles are automatically indented when the amount No. Date Account Tities and Explanation 3 W E

Explanation / Answer

Solution:

Adjustment Entries

Transaction

Date

General Journal

Debit

Credit

1)

March.31

Depreciation Expense (300*3)

900

Accumulated Depreciation - Equipment

900

2)

March.31

Unearned Revenue

3600

Rent Revenue (10800*1/3)

3600

3)

March.31

Interest Expense

625

Interest Payable

625

4)

March.31

Supplies Expense

2930

Supplies (3600 - 670)

2930

5)

March.31

Insurance Expense (800*3)

2400

Prepaid Insurance

2400

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Transaction

Date

General Journal

Debit

Credit

1)

March.31

Depreciation Expense (300*3)

900

Accumulated Depreciation - Equipment

900

2)

March.31

Unearned Revenue

3600

Rent Revenue (10800*1/3)

3600

3)

March.31

Interest Expense

625

Interest Payable

625

4)

March.31

Supplies Expense

2930

Supplies (3600 - 670)

2930

5)

March.31

Insurance Expense (800*3)

2400

Prepaid Insurance

2400

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