Question

Selected accounts of Ideal Properties, a real estate management firm, are shown below as of January 31, 2019, before any adjusting entries have been made.

			Debits		Credits
Prepaid insurance			$6,660
Supplies inventory			1,930
Office equipment			5,952
Unearned rent liability					$5,250
Salaries expense			3,100
Rent revenue					15,000

Monthly financial statements are prepared. Using the following information, record the adjusting entries necessary on January 31 (a) using the financial statements
1. Prepaid Insurance represents a three-year premium paid on January 1, 2019.
2. Supplies of $850 were still available on January 31.
3. Office equipment—purchased on January 1, 2019—is expected to last eight years.
4. On January 1, 2019, Ideal Properties collected six months’ rent in advance from a tenant renting space for $875 per month.
5. Accrued employee salaries of $490 have not been recorded as of January 31.

Record the adjusting entry made on January 31, 2019 for each of the above transactions.

				Cash		Noncash		Contra				Contrib.		Earned						Net
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.

Answer 1

Record the adjusting entry made on January 31, 2019 for each of the above transactions.

				Cash		Noncash		Contra				Contrib.		Earned						Net
Transaction				Asset	+	Assets	-	Assets	=	Liabilities	+	Capital	+	Capital		Revenues	-	Expenses	=	income
1.Prepaid insurance premium.						-185								-185				185		-185
2. Supplies used during January.						-1080								-1080				1080		-1080
3. Office equipment purchased on January 1.								+62						-62				62		-62
4.Rent collected in advance on January 1.										-875				875		875				875
5. Accrued salaries not recorded as of January 31.										490				-490				490		-490