Wages of $12,000 are earned by workers but not paid as of December 31. Depreciation on...

Wages of $12,000 are earned by workers but not paid as of December 31.
Depreciation on the company’s equipment for the year is $10,240.
The Office Supplies account had a $330 debit balance at the beginning of the year. During the year, $4,879 of office supplies are purchased. A physical count of supplies at December 31 shows $538 of supplies available.
The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $2,400 of unexpired insurance benefits remain at December 31.
The company has earned (but not recorded) $750 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.
The company has a bank loan and has incurred (but not recorded) interest expense of $5,000 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.

For each of the above separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31.

Expert Solution

Adjusting entries

No	General Journal	Debit	Credit
a	Wages expense	12000
	Wages payable		12000

b	Depreciation expense	10240
	Accumulated depreciation-equipment		10240

c	Supplies expense (330+4879-538)	4671
	Supplies		4671

d	Insurance expense (5000-2400)	2600
	Prepaid insurance		2600

e	Interest receivable	750
	Interest revenue		750

f	Interest expense	5000
	Interest payable		5000

ekkarill92 answered 3 years ago

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