The ledger of R. Rental Agency Inc. 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 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 per 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 $1,100.
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.
SOLUTION PREVIEW
Adjusting entries:
|
|
Particulars
|
Debit
|
Credit
|
|
1
|
Depreciation expenses (300 * 3)
|
900
|
|
|
|
Accumulated depreciation-Equipment
|
|
900
|
|
2
|
Unearned Rent
|
4,000
|
|
File name: R.-Rental-Agency-Inc.doc File type: application/msword Price: $3
