Question

expense, or accrued revenue) is need December 53-5 Veme Cova Company has the following balances in selected accounts on September 1, mig entries Х 31, 2019. $ -O Accounts Receivable -O Accumulated Depreciation Equipment 7,000 Equipment -0- Interest Payable 10,000 Notes Payable 2,100 Prepaid Insurance -0- Salaries and Wages Payable 2,450 Supplies 30,000 Unearned Service Revenue All the accounts have normal balances. The information below has been gathered at December 31, 2019. 1. Verne Cova Company borrowed $10,000 by signing a 12%, one-year note on 2019. 2. A count of supplies on December 31, 2019, indicates that supplies of $900 are on hand. 3. Depreciation on the equipment for 2019 is $1,000. 4. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2019. 5. On December 1, 2019, Verne Cova collected $30,000 for consulting services to be per: formed from December 1, 2019, through March 31, 2020. 6. Verne Cova performed consulting services for a client in December 2019. The client will be billed $4,200. 7. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2019.

Answer 1

Verne Cova Company Adjusting Enteries Trans. Particulars Debit in $ Credit in $ 1 Interest Expense 400 Interest Payable 400 (Interest accrued) 10000 x 12% x 4/12 2 1550 Supplies Expense Supplies (Supplies used) 2450 - 900 1550 3 1000 Depreciation Expense Accum.Depre-Equip. (To record depreciation) 1000 4 1225 Insurance Expense Prepaid Insurance (Insurance expired) 2100 x 7/12 1225 5 7500 Unearned Service Revenue Consulting Revenue (Revenue earned) 30000/4 7500 6 4200 Accounts Receivable Consulting Revenue (Revenue earned) 4200 7 5400 Salaries Expense Salaries Payable (Salary accrued) 9000 x 3/5 5400