Question

Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information:
November 30
Debit Credit
Supplies $1,000
Prepaid Insurance 4,000
Salaries Payable $9,000
Deferred Revenue 1,000

The following information is known for the month of December:

1. Purchases of supplies during December total $2,500.
2. Supplies on hand at the end of December equal $2,500.
3. No insurance payments are made in December.
4. Insurance cost is $1,000 per month.
5. November salaries payable of $9,000 were paid to employees in December.
6. Additional salaries for December owed at the end of the year are $14,000.

On November 1, a tenant paid Golden Eagle $1,500 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.

Required:
Complete 4 adjusting entries on December 31st. There should be an adjusting entry for each of the following accounts; supplies, prepaid insurance, salaries payable, and unearned revenue.

Answer 1

Answer:

Given Below

Explanation:

Golden Eagle Company

General Journal

Adjusting Entries December 31st

Sr. No                Particulars                 Debit              Credit

1.              Supplies   Expense           $ 1000 Dr.

                     Supplies Account                                      $ 1000 Cr.

The supplies that were at the end of Nov have been used and new supplies purchased are still on hand.

2.          Insurance   Expense           $ 1000 Dr.

                  Prepaid Insurance                                       1,000 Cr.

Insurance cost is $1,000 per month. Insurance of $1000 expired during the month of December.

3.                  Salaries Expense        $ 14000 Dr.

                                Salaries Payable                           $ 14000 Cr.

Salaries for December owed for December are $14,000.

4.             Unearned Revenue            $ 500 Dr.

                                  Revenue Earned                       $ 500 Cr.

Defered Revenue earned at the end of December.