Answer:
Natsu Company
1. Adjusting Journal Entries as of October 31:
a. Debit Supplies Expense $54,370
Credit Supplies $54,370
To record supplies expense for the period.
b. Debit Insurance Expense $4,730
Credit Prepaid Insurance $4,730
To record Insurance expense for the period.
c. Debit Wages Expense $5,000
Credit Wages Payable $5,000
To record unpaid wages for the period.
d. Debit Depreciation Expense- Building $5,400
Credit Accumulated Depreciation $5,400
To record depreciation expense for the year.
e. Debit Rent Receivable $1,000
Credit Rent Revenue $1,000
To record rent revenue for the month.
f. Debit Unearned Rent $1,450
Credit Rent Revenue $1,450
To record rent revenue for two months.
2. General Journal Entries for subsequent cash transactions in November 2017 for c and e:
c:
Date General Journal Debit Credit
Nov. 7 Wages & Salaries Payable $5,000
Cash Account $5,000
To record the payment of wages for the last week of the month ending October 31.
e:
Date General Journal Debit Credit
Nov. 15 Cash Account $2,000
Rent Revenue $1,000
Rent Receivable 1,000
To record the receipt of rent for October and November.
Explanation:
a) Data and Calculations:
1. Supplies
Balance $600
Purchases 54,570
Supplies Exp. 54,370*
Balance $800
2. Policy Date of Purchase Months of Cost
Coverage
A April 1. 2016 24 $6,000
B April 1, 2017 36 7,200
C August 1, 2017 12 1,320
3. Insurance Expense for 2017:
Policy A Nov 2016 to October 2017 $3,000 ($6,000 *12/24)
Policy B April 2017 to October 2017 $1,400 ($7,200 * 7/36)
Policy C Aug. 1 2017 to October 2017 $330 ($1,320 * 3/12)
Total Insurance expense = $4,730
