The unadjusted trial balance for Sierra Corp. is shown below. SIERRA CORPORATION

Question

The unadjusted trial balance for Sierra Corp. is shown below.

SIERRA CORPORATION
Trial Balance
October 31, 2014

900

$28,700

$28,700

Instead of the adjusting entries shown in the text at October 31, assume the following adjustment data.

Prepare the adjusting entries for the items above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

SIERRA CORPORATION
Trial Balance
October 31, 2014

Debit Credit Cash $15,200 Supplies 2,500 Prepaid Insurance 600 Equipment 5,000 Notes Payable $ 5,000 Accounts Payable 2,500 Unearned Service Revenue 1,200 Common Stock 10,000 Retained Earnings 0 Dividends 500 Service Revenue 10,000 Salaries and Wages Expense 4,000 Rent Expense

900

$28,700

$28,700

Explanation / Answer

Adjusting entries:

Sl. no. Account Titles and explanation Debit Credit $ $ 1. Supplies expense 2,000 Supplies 2,000 To record consumption of supplies 2. Insurance expense 100 Prepaid insurance 100 To record expired insurance 3. Depreciation expense 75 Equipment 75 To record depreciation expense on equipment 4. Unearned service revenue 800 Service revenue 800 To recognize revenue on service performed 5 Unbilled revenue 280 Service revenue 280 To recognize revenue on service performed, but unbilled 6. Interest expense 70 Interest expense payable 70 To record interest expense due 7. Salaries and wages expense 1,400 Accrued salaries 1,400 To record salaries due

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