Adjusting Entries

QUIZ
CHAPTER 3
ACTG 500

BE 161

Prepare adjusting entries for the following transactions. Omit explanations.

1. 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.

Solution 161

|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 | | |

Be. 163

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