Question

Exercise 3-7 The ledger of Tamarisk, Inc. on March 31 of the current year includes the selected accounts, shown below, before quarterly adjusting entries have been prepared. Credit Debit $ 3,600 2,900 18.750 Prepaid Insurance Supplies Equipment Accumulated Depreciation Equipment Notes Payable Uneamed Rent Revenue Rent Revenue Interest Expense Salaries and Wages Expense $ 8,700 25,000 10,800 61,000 0 18.000 An analysis of the accounts shows the following The equipment depreciates $300 per month 2. One-third of the unearned rent revenue was earned during the quarter 3. Interest totaling $625 is accrued on the notes payable for the quarter Supplies on hand total 5680. 5. Insurance expires at the rate of $200 per month Prepare the adjusting entries at March 31. astuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Exsense. Interest automatically indented when the amount is entered. Do not indent manually! 4.

Answer 1

Adjusting Journal Entries of Tamarisic, Inc. on 31st March
Transaction	Particulars	LF	Amount Debit	Amount Credit
1	Accumulated Depreciation - Equipment A/C Dr.		900
	To Equipments A/C			900
	(Being Accumulated Depreciation provided on Equipments for the quarter @ $300 per month)
2	Unearned Rent A/C                                                                 Dr.		3600
	To Rent Revenue A/C			3600
	(Being Unearned Rent earned)
3	Interest A/C Dr.		625
	To Notes Payable A/C			625
	(Being interest accrued on notes payable)
4	Supplies Expenses A/C                                                          Dr.		2920
	To Supplies A/C			2920
	(Being Supplies Consumed entered through adjusting entry. Calculated as $3600 - $680)
5	Insurance Expense A/C                                                          Dr.		600
	To Prepaid Insurance A/C			600
	(Being Expiration of Insurance given effect and Preaid Insurance Balance reduced for the quarter @ $200 per month)