The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
|
Debit |
Credit |
|
|
Prepaid Insurance |
$ 3,600 |
|
|
Supplies |
2,800 |
|
|
Equipment |
25,000 |
|
|
Accumulated |
||
|
Depreciation—Equipment |
$ 8,400 |
|
|
Notes Payable |
20,000 |
|
|
Unearned Rent Revenue |
9,900 |
|
|
Rent Revenue |
60,000 |
|
|
Interest Expense |
–0– |
|
|
Wages Expense |
14,000 |
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One third of the unearned rent revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
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 Expense.