Question

Adjusting Entries Written Homework Journalize the necessary adjusting entry for each of the following independent situations: 1. The supplies account balance on September 1, 2020 is 53,975. The supplies on hand on September 30" are $1,050 2. On January 1, 2020 the company paid $3,600 for an annual (12 month) food insurance policy covering their headquarter building a) Assume the company has a monthly accounting period, prepare the adjusting entry needed at the end of January b) Assume the company has a quarterly accounting period (report once every 3 months). Prepare the entry needed at the end of the first quarter. 3. A business pays its employees 51,500 per day and payday is each Friday a) Prepare the adjusting entry needed if the end of the accounting period falls on Monday b) Prepare the adjusting entry needed if the end of the accounting period falls on Thursday 4. On October 1, a tenant pays their landlord $2.500 for five moths rent a) Prepare the entry needed on October 1" to record this transaction b) Prepare the adjusting entry needed on October 31" 4) Prepare the entry needed on October 1" if you are the landlord d) Prepare the adjusting entry needed on October 31" if you are the Landlord

Answer 1

Solution:

Adjusting entries
Situation	Date	Account titles	Debit (in $)	Credit (in $)
1	30th September	Supplies expense	2,925
		Supplies		2,925
		(To record usage of supplies) ($3975-$1050)
2.a.	31st January, 2020	Insurance expense	300
		Prepaid insurance		300
		(To record expiry of insurance cover) ($3600*1/12)
2.b.	31st March, 2020	Insurance expense	900
		Prepaid insurance		900
		(To record expiry of insurance cover) ($3600*3/12)
3.a.		Salaries expense	4,500
		Salaries payable		4,500
		(To record outstanding salary for 3 days) ($1500*3)
3.b.		Salaries expense	9,000
		Salaries payable		9,000
		(To record outstanding salary for 6 days) ($1500*6)
4.a.	1st October	Prepaid rent	2,500
	(As tenant)	Cash		2,500
		(To record rent paid in advance for 5 months)
4.b.	31st October	Rent expense	500
	(As tenant)	Prepaid rent		500
		(To record rent expense for the month of October) ($2500/5)
4.c.	1st October	Cash	2,500
	(As landlord)	Deferred rent revenue		2,500
		(To record rent received in advance for 5 months)
4.d.	31st October	Deferred rent revenue	500
	(As landlord)	Rent revenue		500
		(To record rent income for the month of October)

Note:

1. For points 3a and 3b, it is assumed that the employees are paid for Saturday and Sunday (weekend) as well.