The ledger of Skysong Rental Agency on March 31 of the current year includes the

Question

The ledger of Skysong Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit

Credit

An analysis of the accounts shows the following.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expenses.

Debit

Credit

Prepaid Insurance $3,912 Supplies 2,576 Equipment 23,910 Accumulated Depreciation-Equipment $8,799 Notes Payable 19,490 Unearned Rent Revenue 4,650 Rent Revenue 64,390 Interest Expense –0– Salaries and Wages Expense 15,370

Explanation / Answer

Adjusting entries :

Date accounts & explanation debit credit Depreciation expenses a/c (243*3) 729 Accumlated depreciation-Equipment a/c 729 (To record depreciation exp) Unearned rent revenue (4650/3) 1550 Rent revenue a/c 1550 (To record earned rent revenue) Interest expenses 510 Interest payable a/c 510 (TO record accured interest payable) Supplies expenses a/c 1873 Supplies a/c 1873 (To record supplies expenses) Insurance expenses a/c (326*3) 978 Prepaid insurance 978 (To record insurance expenses adjusted)

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