Question

The ledger of Hammond Company, on March 31, 2020, includes these selected accounts before adjusting entries are prepared.

  Debit   Credit

Prepaid Insurance   RM 3,600

Supplies   2,800

Equipment   25,000

Accumulated Depreciation—Equipment   RM5,000

Unearned Service Revenue   9,200

An analysis of the accounts shows the following.

1.Insurance expires at the rate of RM100 per month.

2.Supplies on hand total RM800.

3.The equipment depreciates RM200 a month.

4.During March, services were performed for one-half of the unearned service revenue.

Prepare the adjusting entries for the month of March.

Answer 1

Solutions :
In the Books of Hammond Co.
Journal Entries
Sr. No.	Particulars	Amount ($)	Amount ($)
1	Insurance Expense	100
	Prepaid Expense		100
	( To Record Insurance Expired )
2	Supplies Expense ($2800-$800)	2000
	Supplies		2000
	( To Record Supplies Used )
3	Depreciation Expense	200
	Accumulated Depreciation -Equipment		200
	( To Record Monthly Depreciation )
4	Unearned Service Revenue	4600
	Service Revenue		4600
	(To Record Revenue for Servies Performed)