Question

Exercise 4-12 The ledger of Windsor, Inc. on July 31, 2022, includes the selected accounts below before adjusting entries have been prepared. Investment in Note Receivable Supplies Prepaid Rent Buildings Accumulated Depreciation-Buildings Unearned Service Revenue Debit Credit $24,000 23,500 3,200 280,000 $140,000 11,900 An analysis of the company's accounts shows the following. 1. The investment in the notes receivable earns interest at a rate of 12% per year. 2. Supplies on hand at the end of the month totaled $15,200. 3. The balance in Prepaid Rent represents 4 months of rent costs. 4. Employees were owed $2,700 related to unpaid salaries and wages. 5. Depreciation on buildings is $6,720 per year. 6. During the month, the company satisfied obligations worth $4,800 related to the Unearned Services Revenue. 7. Unpaid maintenance and repairs costs were $2,300.

Answer 1

Adjusting entry

No	Date	General Journal	Debit	Credit
1	July 31	Interest receivable (24000*12%*1/12)	240
		Interest revenue		240
2	July 31	Supplies expense (23500-15200)	8300
		Supplies		8300
3	July 31	Rent expense (3200/4)	800
		Prepaid rent		800
4	July 31	Salaries and wages expense	2700
		Salaries and wages payable		2700
5	July 31	Depreciation expense (6720/12)	560
		Accumulated depreciation-Building		560
6	July 31	Unearned service revenue	4800
		Service revenue		4800
7	July 31	Maintenance and repairs expense	2300
		Account payable		2300