Question

Adjusting Entries Selected accounts of Ideal Properties Inc., a real estate management firm, are shown below as of January 31, before any adjusting entries have been made: Debit Credit Prepaid insurance $7,460 Supplies 2,730 Office equipment 6,720 Unearned rent revenue 5,730 Salaries expense 3,900 Rent revenue 15,800 Monthly financial statements are prepared. Using the following information, record in a general journal the adjusting entries necessary on January 31: a. Prepaid Insurance represents a three-year premium paid on January 1. b. Supplies of $1,570 were on hand January 31. c. Office equipment is expected to last eight years. Depreciation is recorded monthly. d. On January 1, the firm collected six months' rent in advance from a tenant renting space for $955 per month e. Accrued salaries not recorded as of January 31 are $570 Round your answer to the nearest dollar,

Answer 1

Answer:

Adjusting entry :

Date	accounts & explanation	debit	credit
Jan 31	Insurance expenses (7460/36)	207
	Prepaid insurance		207
	(To record insurance expense)
Jan 31	Supplies expense (2730-1570)	1160
	Supplies		1160
	(To record january supplies expense)
Jan 31	Depreciation expense (6720/8)/12	70
	Accumlated depreciation-office equipment		70
	(To record depreciation expense)
Jan 31	Unearned rent revenue	955
	Rent revenue		955
	(To record portion of advance rent earned in january)
Jan 31	Salary expense	570
	Salary payable		570
	(To record accured salaries at january 31)