Question - Prepare adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expensed; Interest Payable; and Supplies Expense.
The Ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Debit Credit
Prepaid Insurance 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation- Equipment 8,400
Unearned Rent Revenue 20,000
Rent Revenue 6,300
Retained Earnings 60,000
Interest Expense -0-
Wage Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $250/month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $650.
5. Insurance expires at the rate of $300 per month.