Question

What is the purpose of adjusting entries? Given the following situation, please prepare the adjusting journal entries for the end of the period. Please also prepare the T-Accounts.

6/12/18 – Company X paid $3,500 for cleaning supplies.

6/30/18 – Company X has $2,000 of cleaning supplies left.

6/1/18 – Company Y paid $2,400 for 12 months of insurance.

12/31/18 – Company Y needs to adjust the amount of insurance (both expense and amount remaining as a prepaid.

12/31/18 – Company Z realizes that it owes employees $3,500 in wages not yet paid or recorded.

8/1/18 – Student H moves into an apartment in South Side (despite all of the best advice from parents, teachers, and friends). Student H pays for the entire 12 months of rent in advance.  The annual rent is $7,200.  What are the journal entries that Student H and the landlord should record on 12/31/18?

Answer 1