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Johnsons Boat Yard, Inc., repairs, stores, and cleans boats for customers. It is completing the accounting process for the y
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2. Adjusting entries:

Date Account title and explanation Debit Credit
a 11/30 Accounts receivable $3,400
Service revenue $3,400
[To record service revenue]
b 11/30 Advertisement expense [$1,680 x 9/12] $1,260
Prepaid advertisements $1,260
[To record advertisement expense]
c 11/30 Interest expense [210,000 x 9% x 2/12] $3,150
Interest payable $3,150
[To record accrued interest]
d 11/30 Unearned Storage Revenue $730
Service revenue [4,380 x 1/6] $730
[To record service revenue from unearned revenue]
e 11/30 Depreciation expense $26,000
Accumulated depreciation-Equipment $26,000
[To record depreciation expense]
f 11/30 Supplies expense [18,000+47,100-13,100] $52,000
Supplies $52,000
[To record supplies used]
g 11/30 Wages expense $4,000
Wages payable $4,000
[To record accrued wages]

Explanations:

For Prepaid Advertisements, 3 weeks are pending among 12 weeks. It means 9 weeks were completed. So that need to record advertising expense for 9 weeks.

For Unearned storage revenue, Total of 6 months (Nov. 1 to May 1) only 1 month has been completed. So that need to record service revenue for 1 month from unearned revenue..

Interest was paid in last Oct 1. So, Need to calculate accrued interest [Oct 1 to Nov 31] for 2 months.

Supplies expense (used) = Beginning + Purchases - Ending

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