Answer:
1. Debit Supplies expense $5,500
Credit Supplies account $5,500
This will reduce the supplies balance to $3,500 when posted.
2. Debit Insurance expense $4,100
Credit Prepaid Insurance $4,100
The prepaid insurance balance will be $20,500
3. Debit Depreciation expense $2,900
Credit Accumulated depreciation $2,900
Explanation:
When supplies are purchased, debit supplies and credit cash or account payable. When the supplies are used up, credit supplies account and debit supplies expense.
When insurance is prepaid, debit prepaid insurance and credit Cash. On use of the insurance cover, debit Insurance expense, credit prepaid insurance.
When an asset becomes available for use, depreciation will be recognized as the asset is used by debiting depreciation expense and crediting accumulated depreciation.
