The ledger of Sagovic Rental Agency on March 31 of the current year includes the selected accounts on page 206 before adjusting entries have been prepared.
|
Debits |
Credits |
|
|
Prepaid Insurance |
$3,600 |
|
|
Supplies |
3,000 |
|
|
Equipment |
25,000 |
|
|
Accumulated Depreciation—Equipment |
$8,400 |
|
|
Notes Payable |
20,000 |
|
|
Unearned Rent Revenue |
12,400 |
|
|
Rent Revenue |
60,000 |
|
|
Interest Expense |
0 |
|
|
Salaries and Wages Expense |
14,000 |
An analysis of the accounts shows the following.
1. The equipment depreciates $280 per month.
2. Half of the unearned rent revenue was earned during the quarter.
3. Interest of $400 is accrued on the notes payable.
4. Supplies on hand total $850.
5. Insurance expires at the rate of $400 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.