Preparation of journal entries for depreciation, unearned and accrued transactions.
1. 5 (Adjusting Entries) The ledger of Duggan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
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Debit
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Credit
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Prepaid Insurance
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$3,600
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Supplies
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2,800
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Equipment
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25,000
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Accumulated Depreciation-Equip.
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$8,400
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Notes Payable
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20,000
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Unearned Rent Revenue
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9,300
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Rent Revenue
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60,000
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Interest Paid
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-0-
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Wage Expense
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14,000
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An analysis of the accounts shows the following.
1) The 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
Instructions
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. (Omit explanations.)