Question

Prepare adjusting entries for the following transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) 1. Depreciation on equipment is $1,340 for the accounting period. 2. Interest owed on a loan but not paid or recorded is $275. 3. There was no beginning balance of supplies and $550 of office supplies were purchased during the period. At the end of the period $100 of supplies were on hand. 4. Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $700 had expired. 5. Accrued salaries at the end of the period amounted to $900.

Answer 1

Answer:

Please see the adjusting entries below.

Explanation:

1. Depreciation on equipment

Debit Depreciation expense $1,340

Credit Accumulated depreciation $1,340

(To record depreciation expense for the period)

2. Interest on loans

Debit Interest expense  $275

Credit Interest payable  $275

(To record interest on loans)

3. Purchase of office supplies

Debit Office supplies $550

Credit Cash $550

(To record purchase of office supplies)

4. Prepaid rent

Debit Amortization expense $700

Credit Prepayment $700

(To record expired prepayment)

5. Accrued salaries

Debit Salaries expense $900

Credit Accrued salary $900

(To record accrued salaries)