Question

a. Depreciation on the company's equipment for the year is computed to be $11,000. b. The Prepaid Insurance account had a $9,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,570 of unexpired insurance coverage remains. c. The Office Supplies account had a $420 debit balance at the beginning of the year; and $2,680 of office supplies were purchased during the year. The December 31 physical count showed $496 of supplies available. d. Two-thirds of the work related to $12,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,300 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $3,730 of prepaid rent had expired. f. Wage expenses of $3,000 have been incurred but are not paid as of December 31.Prepare adjusting journal entries for the year ended (date of) December 31, for each of these separate situations.

Answer 1

Answer:

depreciation expense 11,000 debit

  acc dep equipment          11,000 credit

insurance expense        7,430 debit

      prepaid expense          7,430  credit

supplies expense      2,604 debit

           supplies                2,604 credit

unearned revenue   8,000 debit

   service revenue        8,000 credit

rent expense         3,730 debit

      prepaid rent          3,730 credit

wages expense     3,000 debit

   wages payable          3,000 credit

Explanation:

9000 insurance - 1,570 unexpired = 7,430 expired

supplies

beginning       420

purchased   2,680

ending            (496)

consumed:   2,604

as the service were earned we decrease the unearned amount and recognzie our service revenue

we are given with the expired amount of the rent so we declare it.

same goes for wages, we are givne with the accrued amount