Question

The following information relates to a company. Prepare the adjusting journal entries required on June 30, 2020 for each of the following situations:

A.	The company prepaid rent for the year on June 1, 2020. Rent expired during the month of June,2020 is $4,700.
B.	On June 1, 2020 supplies were purchased for $2,900. Inventory of supplies was $2,200 on June 30, 2020. Record the adjustment for the amount of the supplies that were used during the month.
C.	A machine purchased on June 1, 2020, for $26,400 has an estimated useful life of 10 years with no salvage value. The company computes depreciation using the straight-line method.
D.	On June 1, 2020 the company signed a 6-month contract for $3,120 of prepaid advertising. Record the adjustment for the amount of the contract that expired during June. Prepare the adjusting journal entries required on June 30, 2020 for each of the following situations:

Answer 1

Th journal entries have been provided below along with calculation in narrations.

General Journal
Date	Particulars	Debit $	Credit $
30 June 2020	Rent Expense A/C - Dr	4700
	To Prepaid Rent A/C		4700
	(Being rent for the month of June expired and adjusted with prepaid rent)
01 June 2020	Supplies A/C -Dr	2900
	To Cash A/C		2900
	(Being supplies purchased)
30 June 2020	Supplies Expenses A/C - Dr	700
	To Supplies A/C		700
	(Being supplies consumed for the month= 2900-2200)
30 June 2020	Depreciation A/C - Dr	220
	To Machinery A/C		220
	(Being Depreciation charged for the month = (26400/10)/12 )
30 June 2020	Prepaid Advertisement A/C - Dr	3120
	To Cash A/C		3120
	(Being advertisement contract made)
30 June 2020	Advertisement Expense A/C -Dr	520
	To Prepaid Advertisement A/C		520
	(Being advertisement expenses for the month adjusted from prepaid advertisement = 3120/6 )