has the following balances in selected accounts on December 31, 2017 Accounts Re

Question

has the following balances in selected accounts on December 31, 2017 Accounts Receivable s 0 Accumulated Depreciation-Equipment 9,800 2,100 Prepaid Insurance Salaries and Wages Payable 2,000 28,000 All the accounts have normal balances. The information below has been gathered at December 31, 2017. 1. Devin wolf Company borrowed $9,800 by signing a 9%, one-year note on September 1, 2017. 2. A count of supplies on December 31, 2017, indkcates that supplies of $800 are on hand. 3. Depreciation on the equipment for 2017 is $1,000. 4. Devin Wolf Company paid $2,100 for 12 months of insurance coverage on June 1, 2017. 5. On December 1, 2017, Devin Wolf collected $28,000 for consulting services to be performed from December 1, 2017, through March 31, 2018. The company had performed 1/4 of the services by December 31. 6. Devin Wolf performed consulting services for a client in December 2017. The dient will be billed $3,500. 7. Devin Wolf Company pays its employees total salaries of $5,100 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29 employees were paid for the week ending December 26. All employees worked the last 3 days of 2017.

Explanation / Answer

S.No General Journal Debit Credit 1 Interest Expense 294 Interest Payable 294 (9800*9%*4/12) 2 Supplies Expense 1200 Supplies 1200 (2000-800) 3 Depriciation Expense 1000 Accumulated Depreciation—Equipment. 1000 4 Insurance Expense 1225 Prepaid Insurance 1225 (2100*7/12) 5 Unearned Service Revenue. 7000 Service Revenue 7000 (28000*1/4) 6 Accounts Receivable 3500 Service Revenue 3500 7 Salaries and Wages Expense 3060 Salaries and Wages Payable 3060 5100*3/5

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