Question

1. Depreciation on the company's equipment for the year is computed to be $16,000.
2. The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,980 of unexpired insurance coverage remains.
3. The Office Supplies account had a $240 debit balance at the beginning of December; and $2,680 of office supplies were purchased in December. The December 31 physical count showed $283 of supplies available.
4. Three-fourths of the work related to $13,000 of cash received in advance was performed this period.
5. The Prepaid Rent account had a $5,500 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $3,520 of rental coverage had expired.
6. Wage expenses of $1,000 have been incurred but are not paid as of December 31.

Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.

Answer 1

Adjusting entry

No	General Journal	Debit	Credit
1	Depreciation expense	16000
	Accumulated depreciation-equipment		16000
2	Insurance expense (8000-1980)	6020
	Prepaid insurance		6020
3	Supplies expense (240+2680-283)	2637
	Supplies		2637
4	Unearned revenue (13000/4)	3250
	Service revenue		3250
5	Insurance expense	3520
	Prepaid insurance		3520
6	Wages expense	1000
	Wages payable		1000

answered by: anonymous