Jenkins Motor Company faced the following situations. Journalize the adjusting entry needed at December 31, 20X8, for each situation. Explanations are not required.
a. The business has interest expense of $9,200 that it must pay early in January 20X9.
b. On July 1, when we collected $12,600 rent in advance, we debited cash and credited Unearned Revenue. The tenant was paying us for two years’rent.
c. Salary expense is $1,900 per day--Monday through Friday--and the business pays employees each Friday. This year, December 31 falls on a Wednesday.
d. The unadjusted balance of the Supplies account is $2,600. The total cost of supplies on hand is $1,200.
e. Equipment was purchased at the beginning of this year at a cost of $160,000. The equipment’s useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment’s carrying amount.
Answer- Journal entries at December 31,20X8,
a) Interest Expense Account Dr. $,9,200
Accrued Interest Payable A/C Cr. $,9,200
b) Unearned Revenue A/c Dr. $ 12,600
Rent Received in Advance A/c Cr. $ 12,600
c) Salary Expense A/c Dr. $ 5,700
Salary Payable A/c Cr. $ 5,700
d) Supplies Expenses A/c Dr. $ 1,400
Supplies Account Cr. $ 1,400
e) Depreciation Expense A/c Dr. $ 32,000
Accumulated Depreciation A/c Cr. $ 32,000
Equipment's carrying amount- $ 128,000
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