Question

Prepare journal entries for the year ended (date of) December 31.

a. Depreciation on the company's equipment for the year is computed to be $ 16,000.

b. The Prepaid Insurance account had a $ 9,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $ 610 of unexpired insurance coverage remains.

C. The Office Supplies account had a $ 400 debit balance at the beginning of the year; and $ 2,680 of office supplies were purchased during the year. The December 31 physical count showed $ 472 of supplies available.

d. One-fifth of the work related to $ 10,000 of cash received in advance was performed this period.

e. The Prepaid Rent account had a $ 5,900 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $ 5,290 of prepaid rent had expired.

f. Wage expenses of $ 4,000 have been incurred but are not paid as of December 31 .

Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.

Answer 1

Company
Journal entries
Date	Account	Debit	Credit	Calculation
31/Dec.	Depreciation expense	$     16,000
a	Accumulated Depreciation-Equipment		$     16,000
31/Dec.	Insurance expense	$        8,390		=9,000-610
b	Prepaid Insurance		$        8,390
31/Dec.	Supplies expense	$        2,608		=400+2,680-472
c	Supplies		$        2,608
31/Dec.	Unearned Revenue	$        2,000		=10,000/5
d	Revenue		$        2,000
31/Dec.	Rent expense	$        5,290
e	Prepaid Rent		$        5,290
31/Dec.	Wages expense	$        4,000
f	Wages Payable		$        4,000