Question

The ledger of Novak Corp. on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

		Debit		Credit
Supplies		$8,400
Prepaid Insurance		10,080
Equipment		70,000
Accumulated Depreciation—Equipment				$23,520
Notes Payable				56,000
Unearned Rent Revenue				34,720
Rent Revenue				168,000
Interest Expense		0
Salaries and Wages Expense		39,200

An analysis of the accounts shows the following.

1.		The equipment depreciates $784 per month.
2.		Half of the unearned rent revenue was earned during the quarter.
3.		Interest of $1,120 is accrued on the notes payable.
4.		Supplies on hand total $2,380.
5.		Insurance expires at the rate of $1,120 per month.

Answer 1

Answer
	Particulars	Debit	Credit
1	Depericiation A/c Dr.	$       2,352		784*3
	Accumulated Depericiation - Equipment A/c		$       2,352
2	Unearned Rent Revenue A/c Dr.	$     17,360		34720/2
	Rent Revenue A/c		$     17,360
3	Interest Expense A/c Dr.	$       1,120
	Interest Payable A/c		$       1,120
4	Supplies Expenses A/c Dr.	$       7,140
	Supplies A/c		$       7,140	2380*3
	( To Record Supplies on hand )
5	Insurance Expense A/c Dr.	$       3,360		1120*3
	Prepaid Insurance		$       3,360
	( To Record Insurance Expenses expired)