Question

The ledger of Bourque Rental Agency on March 31, 2017, includes the following selected accounts before preparing quarterly adjusting entries:

	Debit	Credit
Supplies	$14,400
Prepaid insurance	3,600
Equipment	37,800
Accumulated depreciation—equipment		$ 9,450
Unearned rent revenue		9,300
Notes payable		30,000
Rent revenue		30,000
Salaries expense	14,000

An analysis of the accounts shows the following:

• 1.The equipment has a four-year useful life.
• 2.One quarter of the unearned rent is still unearned on March 31, 2017.
• 3.The note payable has an interest rate of 6%. Interest is paid every June 30 and December 31.
• 4.Supplies on hand at March 31 total $850.
• 5.The one-year insurance policy was purchased on January 1, 2017.
• 6.As at March 31, a tenant owed Bourque $700 for the month of March.

Instructions

Prepare the quarterly adjusting entries required at March 31, 2017.

Answer 1

No.	Date	Account Titles and Explanation	Debit	Credit
1	Mar. 31, 2017	Depreciation expense ($37800 x 1/16)	2362.50
		Accumulated depreciation-equipment		2362.50
		(To record depreciation for the quarter)
2	Mar. 31, 2017	Unearned rent revenue	6975
		Rent revenue ($9300 x 3/4)		6975
		(To record rent revenue earned)
3	Mar. 31, 2017	Interest expense ($30000 x 6% x 1/4)	450
		Interest payable		450
		(To record interest accrued on note)
4	Mar. 31, 2017	Supplies expense ($14400 - $850)	13550
		Supplies		13550
		(To record supplies expense)
5	Mar. 31, 2017	Insurance expense ($3600 x 1/4)	900
		Prepaid insurance		900
		(To record insurance expired)
6	Mar. 31, 2017	Accounts receivable	700
		Rent revenue		700
		(To record rent receivable)

Note: KIndly round off as required since no instructions provided with the question regarding the same.