A company purchased office supplies costing $3,000 and debited Office Supplies f

Question

A company purchased office supplies costing $3,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

debit Office Supplies Expense, $3,600; credit Office Supplies, $3,600.
debit Office Supplies, $600; credit Office Supplies Expense, $600.
debit Office Supplies Expense, $2,400; credit Office Supplies, $2,400.
debit Office Supplies, $2,400; credit Office Supplies Expense, $2,400.

The balance in the prepaid rent account before adjustment at the end of the year is $12,000 and represents three months rent paid on December 1. The adjusting entry required on December 31 is:

debit Prepaid Rent, $4,000; credit Rent Expense $4,000.
debit Prepaid Rent, $8,000; credit Rent Expense, $8,000.
debit Rent Expense, $12,000; credit Prepaid Rent, $12,000.
debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.

Explanation / Answer

debit office supplies expense 2400; credit office supplies 2400 if they bought 3000 and there are still 600 left, 2400 needs to be expensed, debits increase expenses and the credit of 2400 will decrease the asset account of office supplies debit rent expense 4000; credit prepaid rent 4000 one month (4000) needs to be expensed, a debit to rent expense will increase the expense account and credit prepaid rent will decrease the asset account of prepaid rent

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