Question

Depreciation on the company's equipment for 2017 is computed to be $15,000.

The Prepaid Insurance account had a $8,000 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,080 of unexpired insurance coverage remains.

The Office Supplies account had a $370 debit balance on December 31, 2016; and $2,680 of office supplies were purchased during the year. The December 31, 2017, physical count showed $437 of supplies available.

One-fifth of the work related to $10,000 of cash received in advance was performed this period.

The Prepaid Insurance account had a $5,800 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $4,720 of coverage had expired.

Wage expenses of $1,000 have been incurred but are not paid as of December 31, 2017.

Prepare adjusting journal entries for the year ended (date of) December 31, 2017, for each of these separate situations.
  

1-Depreciation on the company’s equipment for 2017 is computed to be $15,000.

2-The prepaid insurance account had a $8,000 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,080 of unexpired insurance coverage remains.

3-The Office Supplies account had a $370 debit balance on December 31, 2016; and $2,680 of office supplies were purchased during the year. The December 31, 2017, physical count showed $437 of supplies available.

4-One-fifth of the work related to $10,000 of cash received in advance was performed this period.

5-The prepaid insurance account had a $5,800 debit balance at December 31, 2017, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $4,720 of coverage had expired.

6-Wage expenses of $1,000 have been incurred but are not paid as of December 31, 2017.

	Transaction General Journal Debit Credit a. 15,000 15,000

Answer 1

a	Depreciation expense—Equipment	15000
	Accumulated depreciation—Equipment		15000
b	Insurance expense	6920		=8000-1080
	Prepaid insurance		6920
c	Office supplies expense	2613		=370+2680-437
	Office supplies		2613
d	Unearned fee revenue	2000		=10000/5
	Fee revenue		2000
e	Insurance expense	4720
	Prepaid insurance		4720
f	Wages expense	1000
	Wages payable		1000