Question

A) Depreciation on the company's equipment for 2017 is computed to be $16,000.

Answer 1

Answer:

Adjusting Journal Entries:

a) Debit Depreciation Expense - Equipment $16,000

   Credit Accumulated Depreciation - Equipment $16,000

To record depreciation charge for the year.

b) Debit Insurance Expense $8,100

   Credit Insurance Prepaid $8,100

To record insurance expense for the year.

c) Debit Office Supplies Expense $2,583

   Credit Office Supplies Account $2,583

To record office supplies used for the year.

d) Debit Deferred Revenue $2,750

   Credit Service Revenue $2,750

To record revenue for work done this period.

e) Debit Insurance Expense $4,200

   Credit Prepaid Insurance $4,200

To record insurance expense for the year.

f) Debit Wages Expense $5,000

  Credit Wages Payable $5,000

To record unpaid wages as of December 31, 2017.

Explanation:

Adjusting journal entries are entries made in the journal to accrue expenses and revenue in line with the accrual concept and the matching principle of U.S. GAAP.  The concept and principle require that expenses and revenue are matched in the period they were incurred and not when they were actually paid for or received.