Question

Adjusting Accounts Selected accounts of Ideal Properties, a real estate management firm, are shown below as of January 31, 2015, before any adjusting entries have been made. Debits Credits Prepaid insurance $13,320 Supplies inventory 3,860 Office equipment 11,904 Unearned rent revenue $10,500 Salaries expense 6,200 Rent revenue 30,000 Monthly financial statements are prepared. Using the following information, record the adjusting entries necessary on January 31 (a) using the financial statements effect template and (b) in journal entry form. 1. Prepaid Insurance represents a five-year premium paid on January 1, 2015. 2. Supplies of $1,700 were still available on January 31. 3. Office equipment-purchased on January 1, 2015 —is expected to last eight years. 4. On January 1, 2015, Ideal Properties collected six months' rent in advance from a tenant renting space for $1,750 per month. 5. Accrued employee salaries of $980 have not been recorded as of January 31. Record the adjusting entry made on January 31, 2015 for each of the above transactions. Cash Noncash Contra Contrib. Earned Transaction Asset + Assets - Assets - Liabilities + Capital + Capital Revenues - Expenses = income 1. Prepaid insurance premium. 2. Supplies used during January. 3. Office equipment purchased on January 1. 4. Rent collected in advance on January 1. 5. Accrued salaries not recorded as of January 31. Net O O O O O

Answer 1

Sr No	Transaction	Cash Asset	+	Non Cash Assets	-	Contra Assets	=	Liabilities	+	Contrib Capital	+	Earned Capital	Revenues	-	Expenses	=	Net Income
1	Prepaid Insurance Premium	13320													2664		-2664
2	Supplies used during January	3860											0		2160		-2160
3	Office Equipment purchased on January 1			11904											1488		-1488
4	Rent collected in advance on January 1	10500											1750				1750
5	Accrued salaries not recorded as of January 31							980							980		-980

Daily General
Date	Description	Debit		Credit
Jan,31	Insurance expenses	2664
	To Prepaid Insurance			2664
	( To record Transaction 1 , adjusting entry )
Jan,31	Supply expense	2160
	To Supply Inventory			2160
	( To record Transaction 2 , adjusting entry )
Jan,31	Depreciation expenses	1488
	To Accumulated Depreciation			1488
	(To record Transaction 3, adjusting entry )
Jan,31	Unearned rent revenue	1750
	To Rent Revenue			1750
	( To record Transaction 4, adjusting entry )
Jan,31	Salary expense	980
	To Salary payable			980
	( To record Transaction 5 , adjusting entry )