Answer:
Wolverine Company
Journal Adjusting Entries:
a) Debit Deferred Revenue $1,050
Credit Rent Received $1,050
To adjust rent received for December.
b) Debit Insurance Expense $5,460
Credit Prepaid Insurance $5,460
To adjust insurance expense for the year.
c) Debit Wages & Salaries $1,100
Credit Wages & Salaries Payable $1,100
To accrue salaries for the month of December.
d) Debit Interest on Loan Account $110
Credit Interest on Loan Payable $110
To accrue interest on loan for the year.
e) Debit Supplies Expense $2,000
Credit Supplies Account $2,000
To record supplies used during the year.
Explanation:
a) Adjusting entries are end of an account period's journal entries used to accrue income or expenses that occurred but are not accurately recorded or because they do not involve actual cash flows. Adjusting entries ensure that the accrual concept and the matching principle of generally accepted accounting principles are complied with.
b) Journal entries record transactions that occur on a daily basis or at the end of the accounting period. They show the accounts to be credited or debited in the Ledger.
