Answer:
1. Wages of $13,000 are earned by workers but not paid as of December 31.
Account Debit Credit
Wages Expense $13,000
Wages Payable $13,000
2. Depreciation on the company’s equipment for the year is $11,560.
Account Debit Credit
Depreciation Expense $11,560
Accumulated Depreciation $11,560
3. The Office Supplies account had a $490 debit balance at the beginning of the year. During the year, $4,582 of office supplies are purchased. A physical count of supplies at December 31 shows $508 of supplies available.
Account Debit Credit
Supplies Expense $4,582
Cash $4,582
Supplies Expense $4,564
Supplies $4,564
4. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $3,200 of unexpired insurance benefits remain at December 31.
$1,800 worth of insurance have been spent, out of the initial $5,000 prepaid insurance balance. ($5,000 - $1,800 = $3,200)
Account Debit Credit
Prepaid Insurance $1,800
Insurance Expense $1,800
5. The company has earned (but not recorded) $950 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.
Account Debit Credit
Interest Receivable $950
Interest Revenue $950
6. The company has a bank loan and has incurred (but not recorded) interest expense of $3,000 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.
Account Debit Credit
Interest Expense $3,000
Interest Payable $3,000
