The ledger of Passehl Rental Agency on March 31 of the current year includes the

Question

The ledger of Passehl Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared.

Debit

Credit

An analysis of the accounts shows the following.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Debit

Credit

Debit

Credit

Prepaid Insurance $ 9,000 Supplies 3,200 Equipment 25,000 Accumulated Depreciation—Equipment $ 8,100 Notes Payable 21,000 Unearned Rent Revenue 10,200 Rent Revenue 59,000 Interest Expense 0 Salaries and Wages Expense 17,000

Explanation / Answer

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date accounts & explanation Debit credit Mar 31 Depreciation expenses a/c 1200 Accumlated depreciation 1200 Mar 31 Unearned rent revenue (10200/3) 3400 Rent revenue a/c 3400 Mar 31 Interest expenses a/c 525 Interest payable a/c 525 Mar 31 Supplies expenses 2650 Supplies a/c 2650 Mar 31 Insurance expenses 1500 Prepaid insurance 1500

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