Question

Exercise 3-05

The ledger of Coronado Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

		Debit			Credit
Prepaid Insurance		$3,720
Supplies		3,053
Equipment		26,290
Accumulated Depreciation-Equipment					$8,921
Notes Payable					20,600
Unearned Rent Revenue					7,500
Rent Revenue					54,170
Interest Expense		–0–
Salaries and Wages Expense		15,330

An analysis of the accounts shows the following.

1.		The equipment depreciates $273 per month.
2.		One-third of the unearned rent was recognized as revenue during the quarter.
3.		Interest of $450 is accrued on the notes payable.
4.		Supplies on hand total $638.
5.		Insurance expires at the rate of $310 per month.

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

Answer 1

Answer
Adjusting entry :
Date	Account & explanation	debit	credit
Mar-31	Depreciation expense (273*3)	$        819
	Accumulated depreciation		$        819
	(To record Depreciation Expense)
Mar-31	Unearned rent revenue (7500/3)	$     2,500
	Rent revenue		$     2,500
	( To Record Unearned rent revenue )
Mar-31	Interest expense	$        450
	Interest payable		$        450
	( To record Interest expense )
Mar-31	Supplies expense (3053-638)	$     2,415
	Supplies		$     2,415
	(To record Supplies expense )
Mar-31	Insurance expense (310*3)	$        930
	Prepaid insurance		$        930
	( To record Insurance )

Please Like