Exercise 3-5

The ledger of Shamrock Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit

Credit

Prepaid Insurance$3,864Supplies2,637Equipment23,780Accumulated Depreciation-Equipment$8,654Notes Payable18,800Unearned Rent Revenue4,980Rent Revenue56,670Interest Expense-0-Salaries and Wages Expense15,100

An analysis of the accounts shows the following.

1.The equipment depreciates $250per month.2.One-third of the unearned rent was earned as revenue during the quarter.3.Interest of $520is accrued on the notes payable.4.Supplies on hand total $585.5.Insurance expires at the rate of $322per month.

1. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expenses. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)