Answer:
Golden Eagle Company
Adjusting Journal Entries:
December 31:
Debit Supplies Expenses $1,200
Credit Supplies $1,200
To record adjusting entry for supplies used.
Debit Insurance Expenses $1,100
Credit Prepaid Insurance $1,100
To record insurance expense for the month.
Debit Salaries Expense $14,200
Credit Salaries Payable $14,200
To record accrued salaries for the month.
Debit Deferred Revenue $600
Credit Rent Revenue $600
To record the rent revenue for the month.
Explanation:
a) Supplies:
Beginning Balance = $1,100
Purchases $2,700
Total available $3,800
Ending balance $2,600
Supplies Expenses $1,200
b) Prepaid Insurance:
Beginning balance = $4,400
Insurance Expense $1,100
Ending balance $3,300
c) Salaries Payable:
Beginning balance = $9,200
Cash payment ($9,200)
Ending balance = $14,200
Salaries Expense = $14,200
d) Deferred Revenue:
Beginning balance = $1,200
Rent Revenue $600
Ending balance $600
e) Adjusting journal entries are made at the end of the accounting period. They help to reconcile the accounts from a cash basis to the accrual basis. With this basis, accrued revenue and expenses, advance payment of expenses, advance receipt of revenue, and depreciation charges are adjusted to reflect in the accounts the period affected by transactions. The aim is to match expenses and revenue to each other and to the period that generated the revenue or incurred the expense.
