Question

X Company's accountant made adjusting entries at the end of the period for the following reasons:

$1,059 of unpaid interest on a bank loan

$553 of wages that were earned by employees but not paid

$1,380 of insurance that expired

What was the effect of these entries on total assets?

Answer 1

Adjusting entries
Sr.No.	Account Titles	Debit	Credit	Effect on Total assets
1	Interest Expense	$1,059.00		No effect
	Interest Payable		$1,059.00	No effect
2	Wages Expenses	$553.00		No effect
	Wages Payable		$553.00	No effect
3	Insurance Expense	$1,380.00		No effect
	Prepaid Insurance		$1,380.00	Decrease
Prepaid insurance is a part of Current assets and expiry of insurance decreases the amount of prepaid insurance and ultimatley Total assets.
The ledgers like Interest expense,Wages expense and Insurance expense decreases the net income which reduces the retained earnings balance
which is part of owner's equity.
Interest payable and Wages payable ledgers are part of Current liabilities.