1. The ledger of Duggan Rental Agency on March 31 of current year comprises the following selected accounts before adjusting entries have been prepared.
| |
Debit |
Credit |
| Prepaid Insurance |
$3,600 |
|
| Supplies |
2,800 |
|
| Equipment |
25,000 |
|
| Accumulated Depreciation-Equip. |
|
$8,400 |
| Notes Payable |
|
20,000 |
| Unearned Rent Revenue |
|
9,300 |
| Rent Revenue |
|
60,000 |
| Interest Paid |
-0- |
|
| Wage Expense |
14,000 |
|
An analysis of accounts shows the following.
1) Equipment depreciates $250 per month
2) One third of the unearned rent was earned during the first quarter.
3) Interest of $500 is accrued in notes payable.
4) Supplies on hand total $850
5) Insurance expires at the rate of $300 per month
problem:
Create adjusting entries at March 31, suppose that adjusting entries are made quarterly.
Additional accounts are: Depreciation Expense; Insurance expense; Interest Payable; and Supplies expense.