Question

On January 2, 20X1, Prepaid Rent had a balance of $15,000. At the end of the year, the amount of Prepaid Rent is $4,000. Required: The adjusting entry on December 31, 20X1 would be to debit Rent expense and credit Prepaid Rent for $ [a].

2. Needles pays employees $2,750 in wages per week. Wages are paid each Friday for a 5-day work week. December 31, 20X1 ends on a Tuesday. Required: The adjusting entry on December 31, 20X1 would be to debit Wages expense and credit payable for $ [b].

3. At the beginning of the year, the Supplies account had $850. During the year $5,600 of supplies were purchased. At December 31, 2009, $475 of supplies were on hand. Required: The adjusting entry on December 31, 20X1 would be to debit Supplies expense and credit Supplies for $ [c].

4. On October 1, 20X1, $21,000 was received from customers in advance for services to be performed from October 1, 20X1 to September 30, 20X2. Required: The adjusting entry on December 31, 20X1 would be to debit Unearned Fees and credit Fees earned for $ [d].

1. A company purchases a two - year insurance policy on June 1, 20X1 for $36,000. The adjusting entry on December 31, 20X1 is debit Insurance Expense, $10,500, and credit Prepaid Insurance, for [a].

2. On September 1, 20X1, $6,000 was received from customers in advance for services to be performed from September 20X1 to August 31, 20X2.

Required: The adjusting entry on December 31, 20X1 to record the amount of Fees earned would be: $ [b].

3. At the beginning of the year, 20X1, the Supplies account had $2,850. During the year $15,600 of supplies were purchased. At December 31, 20X1, $650 of supplies were on hand.

Required: The adjusting entry on December 31, 20X1 would be to debit Supplies expense and credit Supplies for $ [c].

Answer 1

Part A

Date	account titles and explanation	debit	credit
December 31, 20X1	Rent expense	11000
	Prepaid rent (15000-4000)		11000

Part B

Date	account titles and explanation	debit	credit
December 31, 20X1	wages expense	1100
	Wages payable (2750*2/5)		1100

Part C

Date	account titles and explanation	debit	credit
December 31, 20X1	supplies expense	5975
	Supplies (850+5600-475)		5975

Part D

Date	account titles and explanation	debit	credit
December 31, 20X1	unearned fees	5250
	Fees earned (21000*3/12)		5250

Part 1

Date	account titles and explanation	debit	credit
December 31, 20X1	insurance expense	10500
	Prepaid insurance (36000/24*7)		10500

Part 2

Date	account titles and explanation	debit	credit
December 31, 20X1	Unearned fees (6000*4/12)	2000
	Fees earned		2000

Part 3

Date	account titles and explanation	debit	credit
December 31, 20X1	supplies expense	17800
	Supplies (2850+15600-650)		17800