Question 1 The ledger of Whispering Winds Corp. on July 31, 2017, includes the s

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Question 1 The ledger of Whispering Winds Corp. on July 31, 2017, includes the selected accounts below before adjusting entries have been prepared. Debit Credit Investment in Note Receivable Supplies Prepaid Rent Buildings Accumulated Depreciation Buildings Unearned Service Revenue $24,000 20,000 4,600 220,000 $150,000 11,600 An analysis of the company's accounts shows the following. I. The investment in the notes receivable earns interest at a rate of 6% per year. 2. Supplies on hand at the end of the month totaled $18,000 3. The balance in Prepaid Rent represents 4 months of rent costs. 4. Employees were owed $3,400 related to unpaid salaries and wages. 5. Depreciation on buildings is $6,720 per year. 6. During the month, the company satisfied obligations worth $4,750 related to the Unearned Services Revenue. 7. Unpaid maintenance and repairs costs were $2,150

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit July 31 Interest receivable (24000*6%*1/12) 120 Interest revenue 120 (To record accured interest) July 31 Supplies expense (20000-18000) 2000 Supplies 2000 (To record supplies adjusted) July 31 Rent expense (4600/4) 1150 Prepaid rent 1150 (To record rent expense) July 31 Salaries and wages expense 3400 Salaries and wages payable 3400 (To record salary and wages) July 31 Depreciation expense (6720/12) 560 Accumlated depreciation-building 560 (To record depreciation expense) July 31 Unearned service revenue 4750 Service revenue 4750 (To record service revenue) July 31 Maintenance and repairs expense 2150 Maintenance and repairs payable 2150 (To record expense)

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