Question

Adjusting Accounts Selected accounts of Ideal Properties, a real estate management firm, are shown below as of January 31, 2015, before any adjusting entries have been made. Debits Credits Prepaid insurance $13,320 Supplies inventory Office equipment 11,904 Unearned rent revenue $10,500 Salaries expense 6,200 Rent revenue 30,000 Monthly financial statements are prepared. Using the following information, record the adjusting entries necessary on January 31 (a) using the financial statements effect template and (b) in journal entry form. 1. Prepaid Insurance represents a five-year premium paid on January 1, 2015. 2. Supplies of $1,700 were still available on January 31. 3. Office equipment-purchased on January 1, 2015 - is expected to last eight years. 4. On January 1, 2015, Ideal Properties collected six months' rent in advance from a tenant renting space for $1,750 per month. 5. Accrued employee salaries of $980 have not been recorded as of January 31. Record the adjusting entry made on January 31, 2015 for each of the above transactions. Cash Noncash Contra Contrib. Earned Net Transaction Asset + Assets . Assets - Liabilities + Capital + Capital Revenues . Expenses - income 1. Prepaid insurance premium. 2. Supplies used during January. 3. Office equipment purchased on January 1. 4. Rent collected in advance on January 1. 5. Accrued salaries not recorded as of January 31. Oooooo

Answer 1

Transaction	Cash Asset	Noncash Assets	Contra Assets	=	Liabilities	+	Contrib. Capital	Earned Capital	Revenue	Expenses	Net Income
1. Prepaid insurance premium		-222						-222		222	-222
2. Supplies used during January		-2160						-2160		2160	-2160
3. Office equipment purchased on January 1			124					-124		124	-124
4. Rent collected in advance on January 1					-1750			1750	1750		1750
5. Accrued salaries not recorded as of January 31					980			-980		980	-980
	0	-2382	124		-770		0	-1736	1750	3486	-1736

General Journal
Date	Description	Debit	Credit
Jan. 31	Insurance expense ($13320 x 1/60)	222
	Prepaid insurance		222
Jan. 31	Supplies expense ($3860 - $1700)	2160
	Supplies inventory		2160
Jan. 31	Depreciation expense ($11904 x 1/96)	124
	Accumulated depreciation		124
Jan. 31	Unearned rent revenue	1750
	Rent revenue		1750
Jan. 31	Salaries expense	980
	Salaries payable		980