Question

Prepare general journal entries on December 31 to record the following unrelated year-end adjustments.

a. Estimated depreciation on office equipment for the year, $6,500.

b. The Prepaid Insurance account has a $7,650 debit balance before adjustment. An examination of insurance policies shows $3,050 of insurance expired.

c. The Prepaid Insurance account has a $2,750 debit balance before adjustment. An examination of insurance policies shows $975 of unexpired insurance.

d. The company has three office employees who each earn $200 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26, and have worked full days on Monday, Tuesday, and Wednesday, December 29, 30, and 31.

e. On November 1, the company received six months' rent in advance from a tenant whose rent is $1,000 per month. The $6,000 was credited to the Unearned Rent account.

f. The company collects rent monthly from its tenants. One tenant whose rent is $1,950 per month has not paid his rent for December.

Answer 1

Date	Account title	Debit	credit
a	Depreciation expense	6500
	Accumulated depreciation -office equipment		6500
b	Insurance expense	3050
	Prepaid insurance		3050
c	Insurance expense	1775
	Prepaid insurance		1775
	[Being insurance expired 2750-975 =1775]
d	Salaries and wage expense	1800
	Salaries and wages payable		1800
	[Being salaries accrued :3 emloyees * 200 per day*3 days = 1800]
e	Unearned rent revenue	2000
	Rent revenue		2000
	[Being rent revenue earned for   2 months (1Nov -31Dec) =2*1000 =2000)
f	Rent receivable	1950
	Rent revenue		1950