Question

In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period.
a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year
b. The Office Supplies account has a debit balance of $500; a year-end inventory count reveals $100 of supplies still on hand
c. On November 1 of the current year, Rent Earned was credited for $3,750. This amount represented the rent earned for a three-month period beginning November 1
d. Estimated depreciation on office equipment is $800
e. Accrued salaries amount to $1,400

Answer 1

Answer:

insurance expense 195 debit

   prepaid insuance        195 creditç

supplies expense 400 debit

                 supplies           400 credit

rent revenue   1,250 debit

       unearned revenue    1,250 credit

depreciation expense 800 debit

  accumualted depreciation office equipment  800 credit

salaries expense 1,400 debit

        slaries payable    1,400 credit

Explanation:

We should record the expense for the expired months considered the total value of the contract:

Months from October1st to Dec 31th: 3

2,340  x 3 months/ 36 months  = 195

We should sovle for the difference which is the amount used/consumed

500 begining - 100 ending = 400 consumed supplies

we actually earned only 2 months of rent (Nov and Dec) so we should decrease the rent reveneu account:

3,750 / 3 = 1,250

we record the depreciation which is given to us

the accrued salares means we aren't paying them right away thus, we have a liability and an expense.