Question

a. Wages of $7,000 are earned by workers but not paid as of December 31. b. Depreciation on the company's equipment for the year is $10,960. c. The Office Supplies account had a $380 debit balance at the beginning of December. During December, $5,105 of office supplies are purchased. A physical count of supplies at December 31 shows $561 of supplies available. d. The Prepaid Insurance account had a $5,000 balance at the beginning of December. An analysis of insurance policies shows that $2,700 of unexpired insurance benefits remain at December 31. e. The company has earned (but not recorded) $500 of interest revenue for the year ended December 31. The interest payment will be received on 10 days after the year-end January 10. f. The company has a bank loan and has incurred (but not recorded) interest expense of $2,500 for the year ended December 31. The company will pay the interest five days after the year-end on January 5. For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit

Answer 1

No	Transaction	General Journal	Debit	Credit
1	a	Wages expense	$7,000
		Wages payable		$7,000
		( To record Wages expense)
2	b	Depreciation expense	$10,960
		Accumulated depreciation - Equipment		$10,960
		( To record Depreciation expense)
3	c	Supplies expense	$4,924
		Supplies		$4,924
		( To record supplies expense)
4	d	Insurance expense	$2,300
		Prepaid insurance		$2,300
		( To record insurance expense)
5	e	Interest receivable	$500
		Interest revenue		$500
		( To record interest revenue)
6	f	Interest expense	$2,500
		Interest payable		$2,500
		( To record interest expense)

Supplies expense = Supplies beginning + Supplies purchased - Supplies ending

= 380+5,105-561

= $4,924

Insurance expense = Prepaid insurance, beginning - Prepaid insurance, ending

= 5,000-2,700

= $2,300

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