Question

Problem One

Prepare the seven (7) adjusting entries for the information given on the next page and write an explanation for each entry, tell what type of adjusting entry each is. For example,  number 1 is a Prepaid Expense. Round all amounts to the nearest dollar if necessary.

Snowy River Catz, Inc. Trial Balance August 31, 2018
Cash	$23,050
Accounts Receivable	600
Bond Interest Receivable	100
Supplies	420
Prepaid Insurance	2,500
Equipment	18,900
Accumulated Depreciation		$ 900
Accounts Payable		600
Salary Payable
Unearned Service Revenue		12,000
Common Stock		18,820
Retained Earnings		10,000
Service Revenue		19,400
Bond Interest Revenue
Salary Expense	16,150
Insurance Expense
Depreciation Expense
Suppllies Expense
	$61,720	$61,720

1.   Prepaid Insurance remaining in effect at the end of August is $900.

2.   Depreciation for the month of August for the equipment is $600.

3. Supplies used by August 31, $350.

4.   You owe 2 days of salary to employees at August 31. A five-day payroll is $15,000.

5.   You have completed Service Revenue of $17,000 but have not yet billed the client. Record the adjustment on August 31.

6.   There is $3,000 of the amount in Unearned Service Revenue still to be earned at August 31.

7.   You have earned $150 interest on your bonds and will receive the check on September 15.  

Journal
Date	Description	Debit	Credit
Journal
Date	Description	Debit	Credit

Answer 1

Date	Description	Dr	Cr
1	Insurance Expense	1600
	Prepaid Insurance[2500-$900]		1600
2	Depreciation Expense	$600
	Accumulated Depreciation		$600
3	Supplies Expense	350
	Supplies		350
4	Salary Expense [15000/5 * 2]	6000
	Salary Payable		6000
5	Accounts Receivable	$17,000
	Service Revenue		$17,000
6	Unearned Service Revenue	$3,000
	Service Revenue		$3,000 o
7	Accounts Receivable	150
	Bond Interest Revenue		150