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The ledger of R. Rental Agency Inc. on March 31 of the current

 
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