Question

1.

Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Supplies for office use were purchased during the year for $560, of which $130 remained on hand (unused) at year-end.

2. Interest of $280 on a note receivable was earned at year-end, although collection of the interest is not due until the following year.

3. At year-end, salaries and wages payable of $3,900 had not been recorded or paid.

4. At year-end, one-half of a $2,300 advertising project had been completed for a client, but nothing had been billed or collected.

5. Redeemed a gift card for $630 of services.

______________________________________________________________________

2.

For each of the following transactions for the Sky Blue Corporation:

1. Collected $4,350 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1.
2. Paid $2,760 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.
3. Used a machine purchased on October 1 for $55,800. The company estimates annual depreciation of $5,580.

Answer 1

1)	Journal entries
1	Office supplies expense (560-130)	430
	Office supplies		430
2	Interest Receivable	280
	Interest revenue		280
3	Wages Expense	3900
	Wages Payable		3900
4	Accounts Recievable	2300
	Revenue earned		2300
5	Deferred Revenue	630
	Sales Revenue		630
2	Jounral entries
a	Deferred Revenue	4350
	Rent revenue		4350
b	Insurance expense   (2760/24*21)	2415
	Prepaid insurance		2415
c	Depreciation expense- Machine (5580/12*3)	1395
	Accumulated depreciation		1395