Answer:
1. Debit Depreciation expense $1,340
Credit Accumulated depreciation $1,340
2. Debit Interest expense $275
Credit Accrued Interest $275
3. Debit Supplies expense $450
Credit Supplies Account $450
4. Debit Unearned Service revenue $3,100
Credit Service revenue $3,100
5. Debit Salaries expense $900
Credit Accrued Salaries $900
Explanation:
Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.
It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset
Mathematically,
Depreciation = (Cost - Salvage value)/Estimated useful life
It is recorded by debiting depreciation and crediting accumulated depreciation.
When interest is incurred as an expense but yet to be paid, it will be accrued for by Debiting Interest expense and crediting accrued Interest. The same applies to salaries incurred but yet to be paid.
When Supplies is purchased, Debit supplies and credit Cash/Accounts payable. As Supplies are used up, debit supplies expense (with the amount used) and Credit Supplies account.
Amount of supplies used up = $550 - $100
= $450
When a fee is received in advance for a service yet to be rendered, the revenue for such fee is said to be unearned. The entries required are
Debit Cash account and Credit Unearned fees or deferred revenue.
As the service is performed and the revenue is earned, debit Unearned fees and credit revenue.
Earned revenue = $4,000 - $900
= $3,100
