Prepare adjusting entries for the following transactions. Omit explanations.
Depreciation on equipment is $800 for the accounting period. 2.
There was no beginning balance of supplies and purchased $500 of office supplies during the period. At the end of the period $80 of supplies were on hand. 3.
Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $600 was unexpired.
|1 |Depreciation Expense |800 | | | | Accumulated Depreciation - Equipment | |800 | | |To record depreciation on equipment | | | |2 |Supplies Expense (500-80) |420 | | | | Supplies | |420 | | |To record supplies expense | | | |3 |Rent Expense (1000-600) |400 | | | | Prepaid rent expense | |400 | | |To record rent expense | | |
On January 1, Biddle & Biddle, CPAs received a $9,000 cash retainer for legal services to be rendered ratably over the next 3 months. The full amount was credited to the liability account Unearned Revenue. Assuming that the revenue is earned ratably over the 3-month period, what adjusting journal entry should be made at January 31?
|Jan 31 |Unread Service Revenue (9,000 X 1/3) |3,000 | | | | Service Revenue | |3,000 | | |To record the earning of service revenue that was collected in | | | | |advance | | |
River Ridge Music School borrowed $20,000 from the bank signing a 10%, 6-month note on November 1. Principal and interest are payable to the bank on May 1. If the company prepares monthly financial statements, what adjusting entry should the company make at November 30 with regard to the note (round answer to the nearest dollar)?
|Nov 30 |Interest Expense (20,000 X 10% X 1/12) |167 | | | | Interest Payable | |167 |
Match the items below by entering the appropriate code letter in the space provided.
Time period assumption
Revenue recognition principle
A twelve month accounting period
Expenses paid before they are incurred
Cost less accumulated depreciation
Divides the economic life of a business into artificial time periods E
Efforts are related to accomplishments
A contra asset account
Recognition of revenue when it is recorded when earned F
Revenues earned but not yet received
Expenses incurred but not yet paid
A cost allocation process
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