Question

The trial balance for Novak Corp. on August 31 is as follows: Novak Corp. Trial Balance August 31, 2020 Debit Credit $6,900 3,000 1,950 21,300 141,000 $20,304 12,000 Cash Prepaid insurance Supplies Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation equipment Accounts payable Unearned rent revenue Notes payable Common shares Retained earnings Dividends 3,240 4,400 4,600 78,000 81,000 4,250 4,850 71,000 49,314 Rent revenue Salaries and wages expense Insurance expense Interest expense Utilities expense Repairs and maintenance expense 10,500 3,900 8,300 3,780 $266,794 $266,794

Answer 1

1)

Adjusting Entries

No	Accounts tittles and Explanation	Debit	Credit
1.	Insurance Expense	2,250
	Prepaid Insurance [3,000 X 3/4]		2,250
	[Prepaid insurance exhausted for three months ]
2.	Supplies Expense [ 1,950 - 670]	1,280
	Supplies		1,280
	[Adjustment entry made for supplies consumed ]
3.	Depreciation Expense - Building. [141,000 - (141,000X10%)] / 25	5,076
	Accumulated depreciation - Building		5,076
	[Adjustment entry made for depreciation expense on building ]
	Depreciation Expense - Equipment [12,000-(12,000X10%]/10	1,080
	Accumulated depreciation - Equipment		1,080
	[Adjustment entry made for depreciation on equipment ]
4.	Rent Revenue	8,700
	Unearned Rent Revenue		8,700
	[Rent received in advance for September]
	Unearned Rent Revenue	2,300
	Rent Revenue [ 4,600 / 2]		2,300
	[Adjustment entry made for unearned rent revenue, earned during the period ]
5.	Salaries and wages expense	370
	Salaries and wages Payable		370
	[Salaries expense due but not paid ]
6.	Accounts Receivable	895
	Rent Revenue		895
	[Rent revenue earned but not received ]
7.	Interest Expense	1,950
	Interest Payable. [78,000 X 10% X 3/12]		1,950
	[Interest on note payable due but unpaid ]

2)

Novak Corp

Adjusted Trial Balance

August 31, 2020

	Debit	Credit
Cash	6,900
Prepaid Insurance	750
Supplies	670
Land	21,300
Building	141,000
Accumulated depreciation - Building		25,380
Equipment	12,000
Accumulated depreciation - Equipment		4,320
Accounts Payable		4,400
Unearned Rent Revenue		11,000
Note Payable		78,000
Common Stock		81,000
Retained Earnings		4,250
Dividends	4,850
Rent Revenue		65,495
Salaries and wages expense	49,684
Insurance expense	12,750
Interest expense	5,850
Utilities expense	8,300
Repairs and maintenance expense	3,780
Supplies Expense	1,280
Depreciation expense - Building	5,076
Depreciation expense - Equipment	1,080
Salaries and wages payable		370
Interest Payable		1,950
Accounts Receivable	895
Total =	276,165	276,165

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