Question

Exercise 3-23 Clark Motor Ltd. faced the following situations. Journalize the adjusting entry needed at December 31, 2014, for each situation. Consider each fact separately. a. The business has interest expense of $9,000 that it must pay early in January 2015, b. Interest revenue of $3,000 has been earned but not yet received. c. When the business collected $12,000 in advance, it debited Cash and credited Unearned Revenue. The client was paying for two cars, ne delivered in December and one to be delivered in February. d. Salary expense is $1,000 per day-Monday through Friday-and the business pays employees each Friday. This year, December 31 falls on a Tuesday, e. The unadjusted balance of the Supplies account is $3,100. The total cost of supplies on hand is $800. f. Equipment was purchased at the beginning of this year at a cost of $60,000. The equipment's useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment's carrying amount.

Answer 1

	Account Name	Debit	Credit
a	Interest Expense	9,000.00
	Interest Payable		9,000.00
b	Accrued Interest Income	3,000.00
	Interest Income		3,000.00
c	Unearned Revenue	6,000.00
	Revenue		6,000.00
d	Salary Expense	2,000.00
	Salary Payable		2,000.00
e	Supplies Expense	2,300.00
	Supplies		2,300.00
f	Depreciation Expense	12,000.00
	Accumulated Depreciation		12,000.00