Question

PRINTER VERSION NEXT CALCULATOR Exercise 3-07 (Video) The ledger of Sheffield Corp. on March 31 of the current year includes the selected accounts, shown below before quarterly adjusting entries have been prepared Debit Credit Prepaid Insurance $ 7,200 Supplies 3,400 Equipment 18,750 Accumulated Depreciation Equipment $ 8.000 Notes Payable 22.000 Unearned Rent Revenue 10.800 Rent Revenue 60,000 Interest Expense Salaries and Wages Expense 20,000 5 An analysis of the accounts shows the following 1. The equipment depreciates $300 per month 2. One-third of the unearned rent revenue was earned during the quarter Interest totaling $550 is accrued on the notes payable for the quarter Supplies on hand total $790. 5. Insurance expires at the rate of $400 per month Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Date Account Titles Debit Credit Mar. 31 dy 2. Mar. 31 3. Mar 31

Answer 1

Credit Debit $ 900 $ 900 $ 3,600 $ 3,600 No. Account Titles and Explanation 1 Depreciation Expense Accumulated Depreciation - equipment 2 Unearned Rent Revenue Rent Revenue 3 Interest Expense Interest Payable 4 Supplies Expense Supplies 5 Insurance Expense Prepaid Insurance $ 550 $ 550 $ 2,610 $ 2,610 $ 1,200 $ 1,200 Working Notes: 1 Depreciation Expense = $300*3 = $900 2 Unearned Revenue = $10,800*1/3 = $3,600 4 Supplies Expense = $3,400-$790 = $2,610 5 Insurance Expense = $400*3 = $1,200