Question

1)Record the end of month adjusting entries in the general journal.

• Music Equipment owned by the business: original purchase price was $50,000, estimated useful life was 8 years, and estimated residual value was $8,900 at the end of the useful life. Depreciation is calculated on a monthly basis using the straight line method. The monthly depreciation charge is calculated as the yearly depreciation expense divided by the number of months in a year.
• A number of music lessons totalling $3,700 were provided during the month of June for Dan Soul but not yet invoiced.
• The estimated telephone bill payable as at the end of June is $100.
• Instructors work every single day during the week including weekends and are paid on a periodic basis. Wages were last paid up to and including June 14. Wages incurred after that day (from June 15 to June 30 inclusive) are estimated to have been $620 per day.
• Interest expense incurred during the month of June but not yet paid to MRMC Bank for the bank loan is $930.
• Provided $4,690 worth of music lessons during the month of June in relation to the cash received in advance from Council Records on June 12.
• Office supplies totaling $1,368 are still on hand at June 30.
• $2,800 of worth prepaid rent expired during the month of June.

Answer 1

For some entries which needed an explaination has been given with the same.

1. Depriciation A/c Dr... $428.125

To Asset A/c $428.125

(Being depriciation charged on the asset on SLM Basis)

Formula- ($50,000-$8,900)/(8*12)= $428.125

2. Music Lesson Income Receivable A/c Dr... $3,700

To Music Lesson Income A/c $3,700

(Being lessons given but income not received)

3.Telephone bill A/c Dr... $100

To Telephone Bill Payable A/c $100

(Being expense payable)

4.Wages A/c Dr... $18,600

To Cash A/c $18,600

(Being wages paid for the month @620 per day*30 days)

5.Interest Expense A/c Dr... $930

To Interest Payable A/c $930

(Being interest outstanding for the month of june)

6. Cash A/c Dr... $4,690

To Music lesson Advances A/c $4,690

(Being advance received on music lessons)

8. Exccess office supplies A/c Dr... $1,368

To Office Supplies A/c $1,368

( Being office supplies remained unused)

7. Rent expense A/c Dr...$2,800

To Prepaid Rent A/c Dr.... $2,800

(Being rent paid in advance in the earlier period adjusted in the current period)