Question

n December 31, the following data were accumulated for preparing the adjusting entries for Bellingham Realty:

•	The supplies account balance on December 31 is $1,375. The supplies on hand on December 31 are $280.
•	The unearned rent account balance on December 31 is $9,000 representing the receipt of an advance payment on December 1 of four months’ rent from tenants.
•	Wages accrued but not paid at December 31 are $3,220.
•	Fees earned but unbilled at December 31 are $18,750.
•	Depreciation of office equipment is $2,900.

	Required:
1.	Journalize the adjusting entries required at December 31. Refer to the Chart of Accounts for exact wording of account titles.
2.	What is the difference between adjusting entries and correcting entries?

Answer 1

Answer
1
Date	Accounts Titles and Explanation	Debit	Credit
31-Dec	Supplies Expenses	$   1,095		(1375-280)
	Supplies		$      1,095
	[To record supplies consumed for the year]
31-Dec	Unearned Rent	$   2,250		9000/4
	Rent Revenue		$      2,250
	( To record Unearned Rent)
31-Dec	Wages Expenses	$   3,220
	Wages Payable		$      3,220
	( To record Wages Expenses)
31-Dec	Accounts Receivable	$ 18,750
	Fess Revenue		$    18,750
	( To record Fess Revenue )
31-Dec	Depreciation Expenses	$   2,900
	Acc. Depreciation - Office Equipment		$      2,900
	( To record Depreciation Expenses)

2
Adjusting entries	Adjusting entries are required for every accounting period to reflect the accrual method of accounting in financial statement .
correcting entries	are made to rectify any error recorded in the past.