Question

S3-7. (Learning Objective 3: Adjust the accounts) Answer the following questions about prepaid expenses: a. On March 1, Meadow Tree Service prepaid $7,200 for six months' rent. Give the adjusting entry to record rent expense at March 31. Include the date of the entry and an explanation. Then post all amounts to the two accounts involved, and show their balances at March 31. Meadow adjusts the accounts only at March 31, the end of its fiscal year. b. On March 1, Meadow Tree Service paid $1,050 for supplies. At March 31, Meadow has $400 of supplies on hand. Make the required journal entry at March 31. Then post all amounts to the accounts and show their balances at March 31. Assume no beginning balance in supplies.

Answer 1

Answer
a) Adjusting entry
Date	account and explanation	Debit	Credit
Mar-31	Rent expense	$     1,200		7200*1/6
	To Prepaid rent		$     1,200
	(To record rent expense)

b) Adjusting entry
Date	account and explanation	Debit	Credit
Mar-31	Supplies expense	$        650		1050-400
	To Supplies		$        650
	(To record supplies Expense )

Please like