Question

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Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	3
Accounts Receivable		5
Supplies		12
Land		0
Equipment		58
Accumulated Depreciation				$	6
Software		16
Accumulated Amortization					7
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Tax Payable					0
Common Stock					68
Retained Earnings					8
Service Revenue		0
Salaries and Wages Expense		0
Depreciation Expense		0
Amortization Expense		0
Income Tax Expense		0
Interest Expense		0
Supplies Expense		0
Totals	$	94		$	94

Transactions and events during 2018 (summarized in thousands of dollars) follow:

a. Borrowed $12 cash on March 1 using a short-term note.

b. Purchased land on March 2 for future building site; paid cash, $9.

c. Issued additional shares of common stock on April 3 for $26.

d. Purchased software on July 4, $10 cash.

e. Purchased supplies on account on October 5 for future use, $18.

f. Paid accounts payable on November 6, $13.

g. Signed a $25 service contract on November 7 to start February 1, 2019.

h. Recorded revenues of $156 on December 8, including $38 on credit and $118 collected in cash.

i. Recognized salaries and wages expense on December 9, $83 paid in cash.

j. Collected accounts receivable on December 10, $22.

Data for adjusting journal entries as of December 31:

k. Unrecorded amortization for the year on software, $7.

L. Supplies counted on December 31, 2018, $10.

m. Depreciation for the year on the equipment, $6.

n. Interest of $1 to accrue on notes payable.

o. Salaries and wages earned but not yet paid or recorded, $12.

p. Income tax for the year was $8. It will be paid in 2019.

Record the adjusting journal entries (k) through (p). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

Answer 1

Adjusting entry

No	account and explanation	debit	credit
k	Amortization expense	7
	Accumulated Amortization		7
	(To record amortization expense)
L	Supplies expense (12+18-10)	20
	Supplies		20
	(To record supplies adjusted)
m	Depreciation expense	6
	Accumlated depreciation-equipment		6
	(To record dep)
n	Interest expense	1
	Interest payable		1
	(To record accured interest)
o	Salary and wages expense	12
	Salary and wages payable		12
	(To record salary and wages accured)
p	Income tax expense	8
	Income tax payable		8
	(To record income tax expense)