Question

M4-4 Recording Adjusting Journal Entries [LO 4-2]

Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1.	Supplies for office use were purchased during the year for $640, of which $170 remained on hand (unused) at year-end.
2.	Interest of $320 on a note receivable was earned at year-end, although collection of the interest is not due until the following year.
3.	At year-end, salaries and wages payable of $4,300 had not been recorded or paid.
4.	At year-end, one-half of a $2,700 advertising project had been completed for a client, but nothing had been billed or collected.
5.	Redeemed a gift card for $670 of services.

Answer 1

the following are the required journal entries:

sno	General journal	Debit	Credit
1	Supplies expense a/c	$470
	................To Supplies a/c		$470
	(being supplies used = supplies - year end supplies =>$640 - $170 =>$470)
2.	Interest receivable a/c	$320
	.............To Interest revenue a/c		$320
	(since interest amount is not yet due, though earned)
3.	Salaries and wages expense a/c	$4,300
	.............To salaries and wages payable a/c		$4,300
	(being salaries due not yet recorded)
4.	no entry
	(being one half of advetising project worth $2700 completed, does not give rise to raise to revenue and is work in progress)
5.	deferred revenue a/c	$670
	.............To Service revenue a/c		$670
	(being gift card redeemed, gives rise to deferred revenue).