Prepare adjusting entries from selected account data.
The ledger of Welch Rental Agency Inc. on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Prepaid Insurance $3,600
Depreciation-Equipment $ 8,400
Notes Payable 20,000
Unearned rent 12,000
Rent revenue 60,000
Interest expense -0-
Wages expense 14,000
An analysis of the accounts shows the following.
1) The equipment depreciates $300 per month.
2) One-third of the unearned rent was earned during the quarter.
3) Interest of $500 is accrued on the notes payable.
4) Supplies on hand total $1,100.
5) Insurance expires at the rate of $200 per month.
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.
31 Depreciation expense 900
Accumulated Depreciation 900
31 Unearned rent 4000
31 Interest Payble 500
This solution involves adjusting entries for account data.