In: Accounting
Ben Cartwright Pest Control uses following ledgers in its chart of accounts
107. Accounts Receivable 105.Accumulated Depreciation – Equipment 104. Spraying Equipment
201. Interest Payable 209. Notes Payable 103. Prepaid Insurance
205. Salaries Payable 104 .Supplies 208.Unearned Service Revenue
509. Depreciation Expense 405. Service Revenue 534. Interest Expense
510. Salary Expense 518. Insurance Expense 520. Supplies Expense
All of the accounts have normal balances. The information below has been gathered at December 31, 2019.
Required:
I. Adjusting Entries on Monthly Basis:
S.No. | Date | Particulars | Debit | Credit |
a. | Jan 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | |
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Jan) | ||||
Feb 28, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Feb) | ||||
Mar 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of March) | ||||
Apr 30,2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of April) | ||||
May 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of May) | ||||
June 30, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of June) | ||||
July 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of July) | ||||
Aug 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Aug) | ||||
Sept 30, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Sept) | ||||
Oct 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Oct) | ||||
Nov 30, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Nov) | ||||
Dec 31, 2019 | Depreciation Expense (84,000/5)*1/12 | 1,400 | ||
Accumulated Depreciation - Equipment | 1,400 | |||
(To record Depreciation for the month of Dec) | ||||
b. | July 31, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | |
Interest Payable | 200 | |||
(To record Interest Expenses for the month of July) | ||||
Aug 31, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | ||
Interest Payable | 200 | |||
(To record Interest Expenses for the month of Aug) | ||||
Sept 30, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | ||
Interest Payable | 200 | |||
(To record Interest Expenses for the month of Sept) | ||||
Oct 31, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | ||
Interest Payable | 200 | |||
(To record Interest Expenses for the month of Oct) | ||||
Nov 30, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | ||
Interest Payable | 200 | |||
(To record Interest Expenses for the month of Nov) | ||||
Dec 31, 2019 | Interest Expense (24,000*10%)*1/12 | 200 | ||
Interest Payable | 200 | |||
(To record Interest Expenses for the month of Dec) | ||||
c. | Oct 31, 2019 | Insurance Expense (3,600/8) | 450 | |
Prepaid Insurance | 450 | |||
(To record Insurance Expense for the month of Oct) | ||||
Nov 30, 2019 | Insurance Expense (3,600/8) | 450 | ||
Prepaid Insurance | 450 | |||
(To record Insurance Expense for the month of Nov) | ||||
Dec 31, 2019 | Insurance Expense (3,600/8) | 450 | ||
Prepaid Insurance | 450 | |||
(To record Insurance Expense for the month of Dec) | ||||
d. | Dec 31, 2019 | Salary Expense | 5,000 | |
Salaries Payable | 5,000 | |||
(To record salary expense due but not paid) | ||||
e. | Dec 31, 2019 | Accounts Receivable | 3,000 | |
Service Revenue | 3,000 | |||
(To record services performed on account) | ||||
f. | Dec 31, 2019 | Unearned Service Revenue | 7,000 | |
Service Revenue | 7,000 | |||
(To record service revenue performed for advance received) | ||||
g. | Dec 31, 2019 | Supplies Expense (2,000-950) | 1,050 | |
Supplies | 1,050 | |||
(To record supplies expenses incurred) |
Note: Assumed Equipment is purchased in the beginning of the year and hence depreciation is provided in all months.
II. Adjusting Entries on yearly basis:
S.No. | Date | Particulars | Debit | Credit |
a. | Dec 31, 2019 | Depreciation Expense (84,000/5) | 16,800 | |
Accumulated Depreciation - Equipment | 16,800 | |||
(To record Depreciation expense for the year) | ||||
b. | Dec 31, 2019 | Interest Expense (24,000*10%)*6/12 | 1,200 | |
Interest Payable | 1,200 | |||
(To record Interest Expenses for the period of July to Dec) | ||||
c. | Dec 31, 2019 | Insurance Expense (3,600 * 3/8) | 1,350 | |
Prepaid Insurance | 1,350 | |||
(To record Insurance Expense for the period of Oct to Dec) |