Question

Information necessary to prepare the year-end adjusting entries appears below.

Answer 1

Answer: Explanation:

depreciation expense 10,000 debit

    accumulated depreciation   10,000 credit

wages expense      1,500 debit

   wages payable          1,500 credit

interest expense 150 debit (5,000 x 12%/12 months x 3 months)

   interest payable        150 credit

we multiply the principal by rate and time but, the rate is annual so we divide by 12 to convert to monthly

interest receivable 1,333.33 debit (20,000 x 8%/12 x 10)

   interest revenue          1,333.33 credit

we multiply the principal by rate and time but, the rate is annual so we divide by 12 to convert to monthly

insurance expense      250 debit  (6,000/24 x 9 months)

           prepaid insurance            250 credit

we divide the contract by months of duration. Then we multiply  by the month expired

cash    1,600 debit

  unearned revenue 1,600 credit

rent expense   1,200 debit

   prepaid rent           1,200 credit