Question

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 1

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