Question

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 $520, of which $110 remained on hand (unused) at year-end.

2. Interest of $260 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 $3,700 had not been recorded or paid.

4. At year-end, one-half of a $2,100 advertising project had been completed for a client, but nothing had been billed or collected.

5. Redeemed a gift card for $610 of services.

Answer 1

The adjusting entries to record the transaction is as follows:

1. Supplies expense------------Dr--------------$410

Supplies account----------Cr-----------------$410

(To record supplies expense)

Where,

Supplies expense = Beginning balance + Purchases - Ending balance

= $0 + $520 - $110

= $410

2. Interest receivable------------Dr---------$260

Interest revenue-----------Cr------------$260

(To record the interest revenue earned but not received)

3. Salaries expense------------Dr-----------$3,700

Salaries payable----------Cr-------------$3,700

(To record the salaries expense incurred but not paid)

4. Accounts receivable---------------Dr-----------$1,050

Advertising revenue-----------------Cr----------$1,050

(To record the advertising service performed but not billed)

5. Unearned revenue----------------Dr--------------$610

Service revenue----------------Cr-----------------$610

(To record the gift card redeemed)