Question Completion:
Assume that Supplies were purchased during the year worth $13,000.
Record the adjusting entries.
Answer:
Adjusting Journal Entries on December 31, 2021:
Debit Interest Expense $4,000
Credit Interest payable $4,000
To record the accrued interest on the notes payable.
Debit Salaries Expense $3,000
Credit Salaries payable $3,000
To record the accrued salaries at year end.
Debit Supplies Expense $9,200
Credit Supplies $9,200
To record supplies expense for the year.
Explanation:
a) Data and Calculations:
Supplies purchased = $13,000
Supplies at year-end = 3,800
Supplies consumed = $9,200 ($13,000 - $3,800)
b) Adjusting entries are journal entries done at the end of a financial period to ensure that expenses and revenues are matched to the period they occur instead of when cash is exchanged. This accords with the accrual concept and the matching principle of accounting.
