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In: Accounting

Selected amounts at Dec 31, 2019 cash paid employees for salaries & wages $300,000 Cash collected...

Selected amounts at Dec 31, 2019
cash paid employees for salaries & wages $300,000
Cash collected from sales customers $1,850,000
Bonds Payable $500,000
Cash $150,000
Common Stock $60,000
Equipment $840,000
Prepaid Insurance $30,000
Inventory $250,000
Prepaid Rent $140,000
Retained Earnings $130,000
Salaries&Wages Expense $328,000
Sales $2,000,000

Make the following 5 adjusting entries
1) Equipment, purchased Jan 1, 2019 has a useful life of 12 years with no salvage value(straight-line method)
2)Interest accrued on bonds payable is $20,000 as of Dec 31, 2019
3)Unexpired insurance at 12/31/2019 is $7,000
4) Rent payment of $140,000 covered the four months from Dec 1, 2019 thru March 31, 2020
5)Salaries&Wages of $28,000 were earned but unpaid at 12/31/2019.

Solutions

Expert Solution

No. Accounts Title and Explanation Debit Credit
1) Depreciation Expense       70,000 (840000/12)
      Accumulated Depreciation - Equipment      70,000
(To record depreciation expense)
2) Interest Expense       20,000
     Interest Payable      20,000
(To record interest accrued on loan)
3) Insurance Expense       23,000 (30000-7000)
     Prepaid Insurance      23,000 (30000-7000)
(To record insurance expense)
4) Rent Expense       35,000 (140000/4)
     Prepaid Rent      35,000
(To record rent expense)
5) Salary Expense       28,000
     Salary Payable      28,000
(To record salary accrued)

ekkarill92 answered 3 years ago
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