Answer:
1. Dr Cash 2400
Cr Deferred revenue 2400
(To record advance received for office space,which is not earned yet)
2.a)Dr Prepaid insurance 11280
Cr Cash 11280
( To record purchase of insurance )
b) Dr Insurance expense 5640
Cr prepaid insurance 5640
( To record insurance expired)
3. Dr salary expense 1400
Cr Salary payable 1400
( To record salary expense for the m/o December)
4. Dr Cash 7000
Cr Loan payable 7000
( Acquire loan from bank)
5. a) Dr Interest expense 1680
Cr interest payable 1680
( To record interest expense of 2 months )
6. a)Dr supplies 1800
Cr Cash 1800
(Supplies purchased)
b) Dr Supplies expense 1460
Cr Supplies 1460
(Adjusting entry of supplies used)
Explanation:
2. Insurance for the month = 11280/12= 940. For 6 months= 940*6=5640
4. yearly interest rate = 7000 *12% = 840. two month interest = 840 *2= 1680
