a. Depreciation on the company\'s equipment for the year is computed to be $16,0

Question

a. Depreciation on the company's equipment for the year is computed to be $16,000 b. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage An analysis of the company's insurance policies showed that $1,530 of unexpired insurance coverage remains c. The Office Supplies account had a $230 debit balance at the beginning of December, and $2,680 of office supplies were purchased in December. The December 31 physical count showed $271 of supplies available d. Three-fourths of the work related to $13,000 of cash received in advance was performed this period e. The Prepaid Rent account had a $4,800 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $3,270 of rental coverage had expired f. Wage expenses of $4,000 have been incurred but are not paid as of December 31 Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.

Explanation / Answer

Solution:

The adjusting journal entries for the year ended december 31.

Date Particulars Debit $ Credit $ a. Depreciation expense - equipment dr 16,000 To accumulated depreciation 16,000 (To record depreciation expense) b. Insurance expense dr (6000 - 1530) 4,470 To prepaid insurance 4,470 (To record expired portion of prepaid insurance) c. Supplies expense dr (230 + 2680 - 271) 2,639 To supplies 2,639 (to record cost of supplies used) d. Un earned revenue dr (3/4 * 13000) 9,750 To service revenue 9,750 ( To record the amount of service provided from the advance received) e. Insurance expense dr 3,270 To prepaid insurance 3,270 (To record the expired portion of prepaid insurance) f. Wages expense dr 4,000 To wages payable 4,000 (To record unpaid wages expense)

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