Problem - Adjusting Entries
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
Notes Payable 20,000
Unearned Rent Revenue 6,300
Rent Revenue 60,000
Interest Expense -0-
Wage Expense 14,000
An analysis of the accounts shows the following: The equipment depreciates $250 per month, One-third of the unearned rent was earned during the quarter, Interest of $500 is accrued on the notes payable, Supplies on hand total $650, 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.