Question

4-5. Adjusting entries. For each of the following adjusting entries, identify whether the entry is correct. If it is not correct, provide the correct entry in the journal on the next page and specify why the entry given below is wrong. 1,500 Depreciation Expense Accumulated Depreciation 1,500 To record depreciation on trucks for one year. The trucks cost $30,000 and have no salvage value. They are being depreciated straight line over six years. 730 Interest Revenue Interest Receivable 730 To record one year's interest on a loan to an officer of the company. The loan was for $10,000 at 7% interest. 563 Supplies Expense Supplies 563 The Supplies account started with a balance of $1,900. At the end of the period, a count of remaining supplies indicated we had S563 left. d. 1.900 Wages Expense Wages Payable 1,900 Employees have earned $1,900 since last payday. 700 Taxes Payable Taxes Expense 700 The company received a bill from the County Treasurer for $700 for property taxes. The taxes are due next month.

Answer 1

a) Adjusting entry is not correct

Date	account and explanation	Debit	Credit
	Depreciation expense (30000/6)	5000
	Accumulated depreciation-equipment		5000

b) Adjusting entry is not correct

Date	account and explanation	Debit	Credit
	Interest expense (10000*7%)	700
	Interest payable		700

c) Adjusting entry is not correct

Date	account and explanation	Debit	Credit
	Supplies expense (1900-563)	1337
	Supplies		1337

d) Adjusting entry is correct

e) Adjusting entry is not correct

Date	account and explanation	Debit	Credit
	Taxes expense	700
	Taxes payable		700