Question

1. Depreciation on the company’s wind turbine equipment for the year is $5,700.

2. The Prepaid Insurance account for the solar panels had a $2,700 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $950 of unexpired insurance coverage remains at year-end.

3. The company received $5,100 cash in advance for sustainability consulting work. As of December 31, one-third of the sustainability consulting work had been performed.

4. As of December 31, $1,900 in wages expense for the organic produce workers has been incurred but not yet paid.

5. As of December 31, the company has earned, but not yet recorded, $470 of interest revenue from investments in socially responsible bonds. The interest revenue is expected to be received on January 12.

 
For each of the above separate cases, prepare the required December 31 year-end adjusting entries.

Answer 1

TRANSACTION	GENERAL JOURNAL	DEBIT ($)	CREDIT ($)
a	Depreciation Expense	5,700
	Accumulated Depreciation (Equipment)		5,700
	(to record depreciation)
b	Insurance Expense ($2,700 - $950)	1,750
	Prepaid Insurance		1,750
	(to record expired prepaid insurance)
c	Unearned Revenue ($5,100 * 1/3)	1,700
	Consulting Revenue		1,700
	(to record consulting revenue earned)
d	Wages Expense	1,900
	Wages Payable		1,900
	(to record wages incurred but not yet paid)
e	Interest Receivable	470
	Interest Revenue		470
	(to record interest earned but not received)