E4-9 Prepare adjusting entries from selected account data. The ledger...
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Accounting
E4-9
Prepare adjusting entries from selected account data.
The ledger of Howard Rental Agency on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.
Debit
Credit
Supplies
$3,000
Prepaid Insurance
3,600
Equipment
25,000
Accumulated DepreciationEquipment
$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.
Answer & Explanation
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