Prepare adjusting entries in the General Journal

October Transactions

October 1            the owner invested $40,000 cash in the business

October 1            purchased equipment for $15,000 on account.

October 1            purchased a 4-year insurance policy to insure the business for $2000

                                For cash.

October 2            Paid $2000 cash for supplies.

October 4            received $3,000 cash from customers for services rendered

October 14          Paid for the equipment purchase on October 1.

October 15          Paid wages $1,750

October 16          Performed services worth $4,500 for credit customers

October 20          Received $1,400 cash from customers previously billed on account

October 22          the owner withdrew $3,400 cash for personal use

October 31          Paid utility bill for October $500.

End of Month Adjustments—October 31

1. Assume that the equipment purchased on October 1 has no trade-in value and an expected life of 5 years. Prepare the adjusting entry for the month of October.

2. Prepare the adjusting entry for the insurance policy purchased on October 1 for the month of October.

3. After taking a physical count of the supplies, you discover that there are actually $1,400 of supplies left in the supply room. Prepare the adjusting entry for supplies for the month of October.

4. Wages for October 29 – 31 are unpaid at the end of the month. Normally, wages for a regular 5-day work week total $5,000. Prepare the adjusting entry for unpaid wages for the month of October.