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    Adjusting Entries for Welch Rental Agency

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    Prepare adjusting entries for 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 prepaid.

    Debit Credit
    Prepaid Insurance $3600
    Supplies 2800
    Equipment 25,000
    Accumulated
    Depreciation Equipment $8400
    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 a 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 $1100.
    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.

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    Prepare adjusting entries for 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 prepaid.

    Debit Credit
    Prepaid Insurance $3600
    Supplies 2800
    Equipment 25,000
    Accumulated
    Depreciation Equipment $8400
    Notes Payable 20,000
    Unearned ...

    Solution Summary

    The solution explains how to prepare adjusting journal entries

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