Question
The ledger of Howard Rental Agency on September 30 of the current year includes selected accounts below before adjusting entries have been prepared. Supplies: Debit:
The ledger of Howard Rental Agency on September 30 of the current year includes selected accounts below before adjusting entries have been prepared.
Supplies: Debit: 6,000
Prepaid Insurance: Debit: 7,000
Equipment:Debit: 50,000
Accumulated Depreciation-Equipment:Credit:16,800
Notes Payable:Credit: 40,000
Unearned Rent Revenue:Credit:24,800
Rent Revenue:Credit:120,000
Interest Expense:Debit:0
Salaries and Wages Expense:Debit:28,000
An analysis of the accounts show the following.
1). The equipment depreciates 560 per month.
2). Half of the unearned rent revenue was earned from September 30 to date.
3). Interest of 800 is accrued on the notes payable.
4). Supplies on hand total 1,700
5). Insurance expires at the rate of 800 per month.
Prepare the adjusting entries at December 31 assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable and Supplies.
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