Answer:
Shamrock, Inc.
Adjusting Journal Entries:
1. Debit Insurance Expense $280
Credit Prepaid Insurance $280
To record insurance expense for the month.
2. Debit Supplies Expense $1,890
Credit Supplies $1,890
To record supplies expense for the month.
3. Debit Depreciation Expense - Equipment $170
Credit Accumulated Depreciation- Equipment $170
To record depreciation expense for the month.
4. Debit Unearned Service Revenue $5,880
Credit Service Revenue $5,880
To record earned service revenue for the month.
Explanation:
a) Data:
Selected Accounts:
Debit Credit
Supplies 2,780
Prepaid Insurance 2,240
Equipment 25,500
Unearned Service Revenue 14,700
b) The above adjusting entries at the end of March are made by Shamrock in order to accurately recognize its revenue and expenses for the month of March. These entries are in line with the accrual concept and matching principle of generally accepted accounting principles. They require that revenues or expenses earned or incurred in a period be recognized and matched in the affected period, whether cash was exchanged or not.
