The ledger of Piper RentalAgency on March 31 of the current year includes the fo

Question

The ledger of Piper RentalAgency on March 31 of the current year includes the followingselected accounts before adjusting entries have been prepared.

Debit Credit Prepaid Insurance
$3,600 Supplies 2,800 Equipment 25,000 Accummulated


Depreciation-Equipment

$8,400
Notes Payable

20,000
Unearned Rent Revenue

9,900
Rent Revenue

60,000
Interest Expense
          -0-

Wages Expense
14,000


An analysis of the accounts shows thefollowing.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during thequarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on the hand total $700.
5. Insurance expires at the rate of $200 per month.

Instructions
Prepare the adjusting entries at March 31, assuming that adjustingentries are made quarterly. Additional accountsare: Depreciation Expense, Insurance Expense, Interest Payable, andSupplies Expense.

Please Show All Work, Thank You


Debit Credit Prepaid Insurance
$3,600 Supplies 2,800 Equipment 25,000 Accummulated


Depreciation-Equipment

$8,400
Notes Payable

20,000
Unearned Rent Revenue

9,900
Rent Revenue

60,000
Interest Expense
          -0-

Wages Expense
14,000

Explanation / Answer

1. The equipment depreciates $400 per month      =============================       DepreciationExpense                                                      $1,200          AccumulatedDepreciation                                                               $2,100 Depreciation on equipment for the quarter ending March 2. One-third of the unearned rent revenue was earned duringthe quarter      ==============================================      Unearned RentRevenue                                                   $3,300               RentRevenue                                                                              $3,300       Rent Revenue earned 3. Interest of $500 is accrued on the notes payable     =================================      InterestExpense                                                                  $500          InterestPayable                                                                                 $500       Interest on notesaccrued 4. Supplies on the hand total $700      ======================       SuppliesExpense                                                                   $2,100             Supplies                                                                                                 $2,100       Supplies consumed 5. Insurance expires at the rate of $200 per month     ================================       InsuranceExpense                                                                     $600                                                                 PrepaidInsurance                                                                                       $600       Insurance @200 per monthfor 3 months

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