Question

a. Wages of $11,000 are earned by workers but not paid as of December 31, 2017. b. Depreciation on the company's equipment for 2017 is $10,360. c. The Office Supplies account had a $370 debit balance on December 31, 2016. During 2017, $4,895 of office supplies are purchased. A physical count of supplies at December 31, 2017, shows $540 of supplies available. d. The Prepaid Insurance account had a $5,000 balance on December 31, 2016. An analysis of insurance policies shows that $2,100 of unexpired insurance benefits remain at December 31, 2017. e. The company has earned (but not recorded) $900 of interest from investments in CDs for the year ended December 31, 2017. The interest revenue will be received on January 10, 2018. f. The company has a bank loan and has incurred (but not recorded) interest expense of $4,500 for the year ended December 31, 2017. The company must pay the interest on January 2, 2018. For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31, 2017. View transaction list Journal entry worksheet 3 4 5 2 6 Wages of $11,000 are earned by workers but not paid as of December 31, 2017. Note: Enter debits before credits. Transaction General Journal Debit Credit a.

Answer 1

Solution:

Event	Account Titles and Explanation	Debit	Credit
a	Wages Expense	$         11,000
	Wages Payable		$           11,000
	(Being wages payable recorded)
b	Depreciation Expense	$         10,360
	Accumulated Depreciation- Equipment		$           10,360
	(Being depreciation expense)
c	Supplies Expense	$           4,725
	Supplies		$             4,725
	(Being supplies expense)
d	Insurance Expense	$           2,900
	Prepaid Insurance		$             2,900
	(Being insurance expense recorded)
e	Interest Receivable	$               900
	Interest Revenue		$                 900
	(Being interest receivable recorded)
f	Interest Expense	$           4,500
	Interest Payable		$             4,500
	(Being interest payable recorded)

Notes:

1) In case of event d, unexpired insurance at year end is $2,100 and beginning balance is $5,000. So, $2,900 ( $5,000 - $2,100 ) will be the insurance expense for current year.