Problem: Prepare adjusting entries for selected account data. The ledger of Welch Rental Agency Inc. on March 31 of the current year includes the following selected accounts before adjusting entries have been prepaid.
Debit Credit
Prepaid Insurance $3600
Supplies 2800
Equipment 25,000
Accumulated
Depreciation Equipment $8400
Notes Payable 20,000
Unearned Rent 12,000
Rent Revenue 60,000
Interest Expense 0
Wages Expense 14,000
An analysis of the accounts shows the following.
1) The equipment depreciates $300 a 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 $1100.
5) Insurance expires at the rate of $200 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.