Question

Required information (The following information applies to the questions displayed below.) Dyer, Inc., completed its first year of operations on December 31, 2018. Because this is the end of the annual accounting period, the company bookkeeper prepared the following preliminary income statement: $113,500 Income Statement, 2018 Rent Revenue Expenses: Salaries and Wages Expense $28,400 Repairs and Maintenance Expense 12,900 Rent Expense 8,900 Utilities Expense 3,900 Travel Expense 2,900 Total Expenses Income 57,000 $ 56,500 You are an independent CPA hired by the company to audit the firm's accounting systems and financial statements. In your audit, you developed additional data as follows: a. Wages for the last three days of December amounting to $300 were not recorded or paid. b. The $390 telephone bill for December 2018 has not been recorded or paid. C. Depreciation of equipment amounting to $22,900 for 2018 was not recorded. d. Interest of $490 was not recorded on the notes payable by Dyer, Inc. e. The Rental Revenue account includes $3,900 of revenue to be earned in January 2019. f. Supplies costing $590 were used during 2018, but this has not yet been recorded. g. The income tax expense for 2018 is $6,900, but it won't actually be paid until 2019. Required: 1. Prepare adjusting journal entry for each item (a) through (g) should be recorded at December 31, 2018. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

1) Adjusting Entries
Transaction	General Journal	Debit	Credit
a)	Wages Expense	$300
	Wages Payable		$300
	(To record the accrual of wages expenses)
b)	Telephone Expenses	$390
	Accounts Payable		$390
	(To record the accrual of telephone expenses)
c)	Depreciation Expense - Equipment	$22,900
	Accumulated Depreciation - Equipment		$22,900
	(To record the depreciation on the equipment)
d)	Interest Expense	$490
	Interest Payable		$490
	(To record the interest on the notes payable is accrued)
e)	Rent Revenue	$3,900
	Unearned Revenue		$3,900
	(To record the adjustment for the revenue is not yet earned)
f)	Supplies Expense	$590
	Supplies		$590
	(To record the usage of supplies)
g)	Income Tax Expense	$6,900
	Income Tax Payable		$6,900
	(To record the income tax expense)