Question

Exercise 5.5. Zavier Company must make three adjusting entries on December 31, 2016.

1. Supplies used, $11,000; (supplies totaling $18,000 were purchased on December 1, 2016, and debited to the Supplies account).
2. Expired insurance, $8,200; on December 1, 2016, the firm paid $49,200 for six months’ insurance coverage in advance and debited Prepaid Insurance for this amount.
3. Depreciation expense for equipment, $5,800.

Make the journal entries for these adjustments and post the entries to the general ledger accounts: Use paid 3 of the general journal for the adjusting entries. Use the following accounts and numbers.

            Supplies                                  121

            Prepaid Insurance                131

            Accum. Depr. – Equip.         142

            Depreciation Exp. – Equip. 517

            Insurance Expense                521

            Supplies Expense                  523

Answer 1

Solution:

Adjusting Entries
S. no.	Particulars	Debit	Credit
a.	Supplies expense	$11,000
	Supplies		$11,000
b.	Insurance Expense	$8,200
	Prepaid Insurance		$8,200
c.	Depreciation Expense- Equipment	$5,800
	Accumulated Depreciation -Equipment		$5,800