Prepare the adjusting entries using good form for each of the following situatio
ID: 2555427 • Letter: P
Question
Prepare the adjusting entries using good form for each of the following situations as of January 31 (measurement date) for the one month of January: a. Purchased a one-year insurance policy on January 2 for $2,400. 5. 2 3 b. On January 1, the supplies account indicated a $680 balance. On January 31, a physical inspection reveals $200 on hand. c. Equipment was purchased last October 1 for a cost of $10,000. It is estimated to have a 5 year useful life and a $500 residual value. What is the depreciation adjusting entry for January? d. A customer had prepaid $1,200 for future services last September 10. At January 31, all but $200 of the work has been performed in Januany. e. Made arrangements with the local paper to run an ad every Wednesday for $50 each. There are four Wednesdays in January. At January 31, the bill had not yet been received. All accruals are done once a month. As per a contract we have completed performance on a service agreement for a client in the amount of $320. As of January 31, the client had not yet been billed. f.Explanation / Answer
Journal Entries S.no. Accounts title and explanations Debit $ Credit $ a. Insurance expense Dr. 200 Prepaid insurance 200 b. Supplies expense Dr. 480 Supplies 480 c. Depreciation expense-Equipment Dr. 158.33 Accumulated Depreciation-Equipment 158.33 d. Unearned revenue Account Dr. 1000 Service revenue 1000 e. Advertisement Expense Dr. 200 Advertisement expense Payable 200 f. Accounts receivable Dr. 320 Service revenue 320