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The ledger of Welch Rental Agency Inc. on March 31

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.

Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated
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.

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.

Solution Preview

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.

Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated
Depreciation?Equipment $ 8,400
Notes Payable ...

Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment of more than 200 words of text.

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