Question

Prepare general journal entries on December 31 to record the following unrelated year- end adjustments.

a. Estimated depreciation on office equipment for the year, $4,000.

b. The prepaid insurance account has a $3,680 debit balance before adjustment. An examination of insurance policies shows $950 of insurance expired.

c. The prepaid insurance account has a $2,400 debit balance before adjustment. An examination of insurance policies shows $600 of unexpired insurance.

d. The company has three office employees who each earn $100 per day for a five-day workweek that ends on Friday. The employees were paid on Friday, December 26, and have worked full days on Monday, Tuesday, and Wednesday, December 29,30, and 31.

e. On November 1, the company received 6 months rent in advance from a tenant whose rent is $700 per month. The $4,200 was credited to the Unearned Rent account.

f. The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for December.

Answer 1

Date	General Journal	Debit	Credit
Dec-31	Depreciation expense	$   4,000
	Accumulated depreciation		$   4,000
Dec-31	Insurance expense	$      950
	Prepaid insurance		$      950
Dec-31	Insurance expense ($2,400 - $600)	$   1,800
	Prepaid insurance		$   1,800
Dec-31	Salaries and wages expense ($100*3)	$      300
	Salaries and wages payable		$      300
Dec-31	Unearned rent ($700*2)	$   1,400
	Rent revenue		$   1,400
Dec-31	Rent receivable	$      750
	Rent revenue		$      750