Question

PROBLEM 3 (18 PTS) The ledger of Hager Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Account titles Debit Credit Prepaid Insurance 4,200 Supplies 3,400 Equipment 30,000 Accumulated Depreciation-Equipment 10,800 Notes Payable 20,000 Unearned Rent Revenue 10,800 Rent Revenue 60,000 Salaries&Wages Expense 14,000 sept

answer question

Answer 1

Adjusting entries:
date	Accounts title	Debit $	Credit $
31-Mar	Depreciation exp.	675
	Acc depreciation		675
	(the depreciation for the quarter recorded)
31-Mar	Unearned rent revenue	6000
	Rent revenue		6000
	(recording the rent revenue from Unearned rent rev.)
31-Mar	Interest exp.	300		(20000*6%*3/12)
	Interest payable		300
	(interest expense recorded on notes)
31-Mar	Supplies expense	2000		(3400-1400)
	Supplies		2000
	(supplies expense recorded)
31-Mar	Insurance expense	525		(4200*1/8)
	Prepaid insurance		525
	(insurance expense recorded)
31-Mar	Account Receivable	1200
	Services revenue		1200
	(service revenue recorded)
31-Mar	Salaries & wages exp.	900		(300*3)
	Salaries & wages payable		900
	(salaries & wages made payable)