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4 August, 08:39

In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period.

a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year

b. The Office Supplies account has a debit balance of $500; a year-end inventory count reveals $100 of supplies still on hand

c. On November 1 of the current year, Rent Earned was credited for $3,750. This amount represented the rent earned for a three-month period beginning November 1

d. Estimated depreciation on office equipment is $800

e. Accrued salaries amount to $1,400

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  1. 4 August, 10:33
    0
    insurance expense 195 debit

    prepaid insuance 195 creditç

    supplies expense 400 debit

    supplies 400 credit

    rent revenue 1,250 debit

    unearned revenue 1,250 credit

    depreciation expense 800 debit

    accumualted depreciation office equipment 800 credit

    salaries expense 1,400 debit

    slaries payable 1,400 credit

    Explanation:

    We should record the expense for the expired months considered the total value of the contract:

    Months from October1st to Dec 31th: 3

    2,340 x 3 months / 36 months = 195

    We should sovle for the difference which is the amount used/consumed

    500 begining - 100 ending = 400 consumed supplies

    we actually earned only 2 months of rent (Nov and Dec) so we should decrease the rent reveneu account:

    3,750 / 3 = 1,250

    we record the depreciation which is given to us

    the accrued salares means we aren't paying them right away thus, we have a liability and an expense.
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