Question

Exercise 5.5 Journalizing and posting adjustments. LO 5-5 Desoto Company must make three adjusting entries on December 31, 2019. a. Supplies used, $10,600 (supplies totaling $17,200 were purchased on December 1, 2019, and debited to the Supplies account) b. Expired insurance, $7,800; on December 1, 2019, the firm paid $46,800 for six months' insurance coverage in advance and debited Prepaid Insurance for this amount. c. Depreciation expense for equipment, $5,400 Required: Prepare the journal entries for these adjustments and post the entries to the general ledger accounts

• Prepare the adjusting entry for supplies.
• Prepare the adjusting entry for insurance.
• Prepare the adjusting entry for depreciation.

Answer 1

ANSWER:

Date	General journal	Debit	Credit
a)	Supplies expenses	$10,600
	Supplies Account		$ 10,600.00
	(Being entry for supplies used)
b)	Insurance expenses	$ 7,800.00
	Prepaid Insurance		$ 7,800.00
	(Being recording of insurance expenses expired)
c)	Depreciation expenses- Equipment	$ 5,400.00
	Accumulated depreciation - Equipment		$ 5,400.00

Supplies
Date	Debit	Credit	Balance
1/12/2019	$ 17,200.00
31/12/2019		$ 10,600.00	$ 6,600.00
Supplies expenses
Date	Debit	Credit	Balance
31/12/2019	$    10,600.00		$    10,600.00
Prepaid insurance
Date	Debit	Credit	Balance
1/12/2019	$ 46,800.00
31/12/2019		$ 7,800.00	$ 39,000.00
Insurance expenses
Date	Debit	Credit	Balance
31/12/2019	$    7,800.00		$    7,800.00
Accumulated depreciation - equipment
Date	Debit	Credit	Balance
31/12/2019		$ 5,400.00	$ 5,400.00
Depreciation expenses - equipment
Date	Debit	Credit	Balance
31/12/2019	$    5,400.00		$    5,400.00

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