For each of the following separate cases. prepare adjusting entries required for

Question

For each of the following separate cases. prepare adjusting entries required for financial statements for the Exercise 3-4 year ended (date of) December 31, 2015. (Assume that prepaid expenses are initially recorded in asset Preparing adjusting accounts and that fees collected in advance of work are initially recorded as liabilities.) entries a. One-third of the work related to $15,000 cash received in advance is performed this period. P1 b. Wages of $8,000 are earned by workers but not paid as of December 31, 2015. c. Depreciation on the company's equipment for 2015 is $18,000.

Explanation / Answer

Journal Entry Date Particulars Dr. Amount Cr. Amount a. Fees Collected in Advance                               Dr. 5000    To Fees - Income 5000 (Work done 1/3 of fees collected in advance) b. Wages Expenses                                                   Dr. 8000 To wages Payable 8000 (Wages due but not paid are recognised) c. Depreciation Exp.                                                Dr. 18000 To accumulated dep. - Equipment 18000 (Depreciation charged on equipment) d. Supplies Exp.                                                       Dr. 5000 To Supplies 5000 (Cost of supplies used are transffered to expense account) e. Insurance Exp                                                     Dr. 2800    To Prepaid insurance 2800 (Insurance charged for the year) f. Interest on Investment Accrued                Dr. 1050 To Interest Income 1050 (Interest accrued on investment recognised) g. Interest Exp.                                                      Dr. 2500     To Accrued Interest on Bank Loan 2500 (Interest on bank loan due)

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