Question

Adjusting Entries Exercise 1. Purchased advertising supplies of $25,000 on Dec. 1". An inventory count on Dec 31" reveals $10,000 on hand. 2. Paid $6,000 for a one-year insurance on Dec. 1". 3. Paid $50,000 for an office equipment on Dec. 1". It can be used for 10 years, and will be worth $2,000 (salvage value) at the end of the tenth year. 4. Receive $12,000 on Dec. 1" for advertising services to be completed over the next three months. 5. Earned $2,000 for services provided on Dec 31", but not billed to a client. 6. Signed a 12%, 3-month note payable in the amount of $50,000 on Dec. 1". Interest is payable at the end of the third month. 7. Salaries expense is $10,000 per week and paid every Friday. Dec. 31" is Wednesday,

Answer 1

Credit Debit 15,000 15,000 500 500 400 400 Transaction General Journal Supplies Expense ($25,000 - $10,000) Supplies Insurance Expense ($6,000/12) Prepaid Insurance Depreciation Expense [($50,000-$2,000)/120] Accumulated Depreciation Unearned Service Revenue ($12,000/3) Service Revenue Accounts Receivable Service Revenue Interest Expense ($50,000 * 12% * 1/12) Interest Payable Salaries Expense ($10,000 /5* 3) Salaries Payable 4,000 4,000 2,000 2,000 500 500 6,000 6,000