Question

Requirement 1. Journalize the adjusting entry needed on December ​31, the end of the current accounting​ period, for each of the following independent cases affecting Tiger Corporation. Include an explanation for each entry.

Details of the Prepaid Insurance account reveal a January 1​ (beginning of the​ year) debit balance of $2,700 and a debit to the account on March 31 for $3,700to record the payment of an annual insurance premium. At December 31​, $2,000 is still prepaid. ​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

Mar Prepaid insurance Jan 1 Bal 2,700 31 3,700 Tiger prepays insurance on March 31 each year. At December 31, $2,000 is still prepaid. b. Tiger pays employees each Friday. The amount of the weekly payroll is $5,600 for a five-day work week. The current accounting period ends on Monday. c. Tiger has a note receivable. During the current year, Tiger has earned accrued interest revenue of $600 that it will collect next year. d. The beginning balance of supplies was $2,900. During the year, Tiger purchased supplies costing $6,300, and at December 31 supplies on hand total $2,100. e. Tiger is providing services for Shark Investments, and the owner of Shark paid Tiger an annual service fee of $11,400. Tiger recorded this amount as Unearned Service Revenue. Tiger estimates that it has earned 60% of the total fee during the current year. f. Depreciation for the current year includes Office Furniture, $3,200, and Equipment, S6,200.

Answer 1

Transaction	General Journal	Debit	Credit
a.	Insurance expense	$4,400
	Prepaid insurance		$4,400
	( To record insurance expense)
b.	Salaries expense	$1,120
	Salaries payable		$1,120
	( To record the salaries expense)
c.	Interest receivable	$600
	Interest revenue		$600
	( To record interest revenue)
d.	Supplies expense	$7,100
	Supplies		$7,100
	( To record supplies expense)
e.	Unearned service revenue	$6,840
	Service revenue		$6,840
	( To record unearned service revenue earned)
f.	Depreciation expense	$9,400
	Accumulated depreciation- Office furniture		$3,200
	Accumulated depreciation- Equipment		$6,200
	( To record depreciation expense)

a.

Prepaid insurance, beginning = $2,700

Prepaid insurance, ending = $2,000

Insurance paid = $3,700

Insurance expense = Prepaid insurance, beginning + Insurance paid- Prepaid insurance, ending

= 2,700+3,700-2,000

= $4,400

b.

Salaries expense for 5 days = $5,600

Salaries expense for 1 day = 5,600 x 1/5

= $1,1,20

d.

Beginning supplies = $2,900

Supplies purchased = $6,300

Ending supplies = $2,100

Supplies expense = Beginning supplies+ Supplies purchased- Ending supplies

= 2,900+6,300-2,100

= $7,100

e.

Unearned service revenue earned = 11,400 x 60%

= $6,840

Kindly give a positive rating if you are satisfied with this solution and please ask if you have any query.

Thanks