The effects of adjusting journal entries on the accounting equation
Beta Alloys made the following adjusting journal entries on December 31, 2011.
|
1. Wage Expense |
10000 |
|
Wages Payable |
10000 |
|
2.Insurance Expense |
5000 |
|
Prepaid Insurance |
5000 |
|
3.Interest Receivable |
1000 |
|
Interest Revenue |
1000 |
|
4. Unearned Rent Revenue |
6000 |
|
Rent Revenue |
6000 |
|
5. Depreciation Expense |
20000 |
|
Accumulated Depreciation |
20000 |
|
6. Supplies Expense |
8000 |
|
Supplies Inventory |
8000 |
|
7. Unearned Subscription Revenue |
2000 |
|
Subscription Revenue |
2000 |
REQUIRED:
Classify each adjusting entry as either an accrual adjustment (A) or a cost expiration adjustment (C), and indicate whether each entry increases ((), decreases (–), or has no effect (NE) on assets, liabilities, shareholders” equity, revenues, and expenses. Organize your answer in the following way. The first journal entry has been done for you.
|
Entry |
Classification |
Assets |
Liabilities |
Shareholders” Equity |
Revenues |
Expense |
|
1 |
A |
NE |
+ |
– |
NE |
+ |