Question

Problem 3-5A Sunland Company has the following balances in selected accounts on December 31, 2017. Sunland has a calendar year-end. Accounts Receivable $ 0 Accumulated Depreciation—Equipment 0 Equipment 7,200 Interest Payable 0 Notes Payable 9,600 Prepaid Insurance 2,004 Salaries Payable 0 Supplies 2,680 Unearned Revenue 30,200 All the accounts have normal balances. The information below has been gathered on December 31, 2017. 1. Sunland Company borrowed $9,600 by signing a 4%, one-year note on September 1, 2017. 2. A count of supplies on December 31, 2017, indicates that supplies of $930 are on hand. 3. Depreciation on the equipment for 2017 is $830. 4. Sunland Company paid $2,004 for 12 months of insurance coverage on June 1, 2017. 5. On December 1, 2017, Sunland collected $30,200 for consulting services to be performed evenly from December 1, 2017, through March 31, 2018. 6. Sunland performed consulting services for a client in December 2017. The client will be billed $3,100. Payment from the customer is expected on January 15, 2018. 7. Sunland Company pays its employees total salaries of $10,300 every Wednesday for the preceding five-day week (Monday through Friday). On Wednesday, January 3, 2018, employees were paid for the last five weekdays of 2017.

Prepare the appropriate subsequent cash entries. (Credit account titles are automatically indented when the 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
No	Particulars	Debit	Credit
1	Interest expense	$            384
	Interest payable (9600*12%*4/12)		$          384
	(To record Interest expenses)
2	Supplies expense (2680-930)	$         1,750
	Supplies		$       1,750
	(To record supplies expenses)
3	Depreciation expense	$            830
	Accumulated depreciation-equipment		$          830
	(To record depreciation)
4	Insurance expense (2004*7/12)	$         1,169
	Prepaid insurance		$       1,169
	(To record Insurance)
5	Unearned service revenue (30200/4)	$         7,550
	Service revenue		$       7,550
	(To record unearned service revenue)
6	Account receivable	$         3,100
	Service revenue		$       3,100
	(To record account receivable)
7	Salaries and wages expense (10300/5*3)	$         6,180
	Salaries and wages payable		$       6,180
	(To record salary & wages)