Question

Depreciation on the company's equipment for 2017 is computed to be $13,000. The prepaid insurance account had a $6,000 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $540 of unexpired insurance coverage remains. The office supplies account had a $420 debit balance on december 31, 2016; and $2,680 of office supplies were purchased during the year. The december 31, 2017, physical count showed $496 of supplies available. One-third of the work related to $15,000 of cash received in advance was performed this period. The prepaid insurance account had a $5,000 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $4,460 of coverage had expired. Wage expenses of $3,000 have been incurred but are not paid as of december 31, 2017.

Answer 1

                            Depreciation Expense..................Dr $13000

                                   To Accumulated Depreciation.........................$13000

(Being Depreciation Expense recorded)

                        Insurance Expense........................Dr $5460

                                  To Prepaid Insurance....................................$5460

(Being Insurance Expensed)

                   Supplies Expenses............................Dr $ 2604

                         To Supplies.......................................................... $2604

(Being Supplies Consumed Expensed)

                     Unearned Revenue......................Dr $5000

                       To Service Revnue............................................ $5000

(Being Revenue earned)

                      Insurance Expense......................Dr $4460

                       To Prepaid Insurance......................................$ 4460

(Being insurance expensed)

                  Wages Expense.........................Dr  $3000

                       To Wages Payable..................................... $3000

(Being Wages Expense incurred)