Question

Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information: Supplies Prepaid Insurance Salaries Payable Deferred Revenue November 30 Debit Credit $1,750 7,000 $ 10,500 2,500 The following information is known for the month of December: 1. Purchases of supplies during December total $4,000. Supplies on hand at the end of December equal $3,250. 2. No insurance payments are made in December. Insurance cost is $1,750 per month. 3. November salaries payable of $10,500 were paid to employees in December. Additional salaries for December owed at the end of the year are $15,500. 4. On November 1, a tenant paid Golden Eagle $3,750 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount. Required: Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer

--Adjusting entries

	Accounts title	Debit	Credit
31-Dec	Supplies Expense	$2,500
	Supplies ($1750 + 4000 - 3250)		$2,500
	(to record supplies used)
31-Dec	Insurance Expense	$1,750
	Prepaid Insurance		$1,750
	(to record insurance expired)
31-Dec	Salaries Expense	$15,500
	Salaries payable		$15,500
	(to record accrued salaries)
31-Dec	Deferred Revenue ($3750 x 1 month /3months)	$1,250
	Rent Revenue earned		$1,250
	(to record 1 month revenue now earned)