Question

The ledger of Sunland Company on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

An analysis of the accounts shows the following.

1. The equipment depreciates $330 per month.

2. Half of the unearned rent revenue was earned during the quarter.

3. Interest of $470 is accrued on the notes payable.

4. Supplies on hand total $800.

5. Insurance expires at the rate of $460 per month.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

No 1 Date Account Titles and Explanation Mar. 31 Depreciation Expense Accumulated Depreciation - equipment Debit | Credit $ 990 $ 990 2 $ 5,325 Mar. 31 Unearned Rent Revenue Rent Revenue $ 5,325 3 S 470 Mar. 31 Interest expense Interest Payable $ 470 4 $ 2.650 Mar. 31 Supplies Expense Supplies $ 2,650 5 $ 1,380 Mar. 31 Insurance Expense Prepaid Insurance $ 1,380 1 2 Working Notes: Depreciation Expense = $330*3 = $990 Unearned Rent Revenue = $10,650*1/2 = $5,325 Supplies Expense = $3,450-$800 = $2.650 Insurance Expense = $460*3 = $1,380 5