Question

Nanhoe Co, provides music lessons to many clients across the city. The following information is available to be used in recording annual adjusting entries at the company's September 30, 2021. year end: 1 On October 1, 2020, the company had a balance of $1.990 in its supplies account. Additional supplies were purchased during the year totalling $1,790. The supplies inventory on September 30, 2021, amounts to $800. 2. On November 1, 2020, Ivanhoe purchased a one-year insurance policy for $3,120. 3. On January 2, 2021, a client paid $1,560 for six months of lessons starting April 2, 2021 4. On February 1, 2021, Ivanhoe purchased a grand piano (to be used in music lessons) for $25,200. The piano's estimated useful life is 12 years. 5. On May 1, 2021, Ivanhoe borrowed $29.400 from the bank and signed a 10-month, 8% note payable. Interest and principal are to be paid at maturity. 6. On August 1,2021, Ivanhoe signed a contract with a neighbourhood school to provide weekly piano lessons to some of its students for a fee of $1,760 per month. The contract called for lessons to start on September 1, 2021. The school has not yet been sent an invoice for the month of September 7. On August 15, 2021, the company paid $10,080 to Pinnacle Holdings to rent additional studio space for nine months starting September 1. Ivanhoe recorded the full payment as Prepaid Rent. B. Ivanhoe's instructors have earned salaries of $3,370 for the last week of September 2021. This amount will be paid to the Instructors on the next payday, October 6, 2021 9. Music lessons were provided to a local church group for $1.260 on September 30, 2021. Ivanhoe has not yet invoiced the group or recorded the transaction 10. In early October 2021, Ivanhoe received an invoice for $910 from the utility company for September utilities. The amount has not yet been recorded or paid. Prepare the adjusting journal entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to the nearest whole dollar.. 5.275. If no entry is required, select "No Entry for the account titles and enter for the amounts.) No. Date Account Titles and Explanation Debit Credit 1. Sept. 30 > ?

Answer 1

Answer: The Adjusting journal entries are as follows:

No.	Date	Accounts Titles and Explanation	Debit	Credit
1	Sept.30	Supplies Expenses	$2,980 ($1,990+$1,790-$800)
		Supplies		$2,980 ($1,990+$1,790-$800)
		(Adjusting journal entry for recording supplies expenses during 1/10/2020 to 30/09/2021)
2	Sept.30	Insurance Expense	$3,120
		Prepaid Insurance		$3,120
		(Adjusting journal entry for recording expired insurance)
3	Sept.30	Unearned Revenue	$1,560
		Prepaid Expense		$1,560
		(Adjusting journal entry for recording accrued revenue)
4	Sept.30	Depreciation Expense	$25,200
		Accumulated Depreciation-Equipment		$25,200
		(Adjusting journal entry for recording depreciation equipment)
5	Sept.30	Interest Expense	$29,400
		Service Revenue		$29,400
		(Adjusting journal entry for recording Interest Expense)
6	Sept.30	Accounts Receivable	$1,760
		Unearned Revenue		$1,760
		(Adjusting journal entry for recording the amount yet to receive)
7	Sept.30	Rent Expense	$1,120 ($10,080/9)
		Prepaid Rent		$1,120 ($10,080/9)
		(Adjusting journal entry for recording prepaid rent)
8	Sept.30	Salaries Expense	$3,370
		Salaries Payable		$3,370
		(Adjusting journal entry for recording salaries payable)
9	Sept.30	Accounts Receivable	$1,260
		Unearned Service Revenue		$1,260
		(Adjusting journal entry for recording services provided but not earned)
10	Sept.30	Utilities Expense	$910
		Accounts Payable		$910
		(Adjusting journal entry for recording amount payable)