I have to journalize the adjusting entries for a-f A. Cleaning supplies on hand
ID: 2568390 • Letter: I
Question
I have to journalize the adjusting entries for a-f A. Cleaning supplies on hand at the end of November were $100. B. One month's depreciation on the truck was $100 and on the equipment was $125. C. One month's accrued interest expense is $120. D. At the beginning of November, the business paid $2,400 for rent for November through February (four months). Record the rent expense for November E. In November, the business paid $3,000 for a one-year insurance policy. Record the insurance expense for November. F. On November 16 (halfway through the month), the business received $9,600 for a one-year contract for cleaning services to be provided. The contract begins on November 16, 2015, and ends November 15, 2016. Record the amount earned in November. (Assume one-half of one month's worth of services have been performed.)Explanation / Answer
Date
Account Title & Explanation
Debit
Credit
(A)
(No entry)
(B)
Depreciation expense
100
Accumulated depreciation – Truck
100
(For recording depreciation on truck)
Depreciation expense
125
Accumulated depreciation - Equipment
125
(For recording depreciation on Equipment)
(C)
Interest expense
120
Interest payable
120
(For recording accrued interest)
(D)
Rent expense
600
Prepaid rent
600
(For recording rent expense used of November month)
(E)
Insurance expense
250
Prepaid insurance
250
(For recording insurance expense used of November month)
(F)
Unearned service revenue
400
Service revenue
400
(For recording amount of service revenue for 15 days of November)
Working Note;
1. Adjusting entry is paased for supplies consumed. So when we record supplies consumed then supplies on hand automatically remained.
Apart from this supplies purchased is also recorded thus for supplies on hand no adjusting entry will be passed.
2. Rent expense for November is calculated as follow;
$2400 / 4 = $600
3. Insurance expense for November is calculated as follow;
$3000 / 12 = $250
4. Service revenue for November is calculated as follow;
$9600 / 12 = $800
But half month service have been performed in November that is why we will record it for 15 days;
$800 / 2 = $400
Date
Account Title & Explanation
Debit
Credit
(A)
(No entry)
(B)
Depreciation expense
100
Accumulated depreciation – Truck
100
(For recording depreciation on truck)
Depreciation expense
125
Accumulated depreciation - Equipment
125
(For recording depreciation on Equipment)
(C)
Interest expense
120
Interest payable
120
(For recording accrued interest)
(D)
Rent expense
600
Prepaid rent
600
(For recording rent expense used of November month)
(E)
Insurance expense
250
Prepaid insurance
250
(For recording insurance expense used of November month)
(F)
Unearned service revenue
400
Service revenue
400
(For recording amount of service revenue for 15 days of November)