Question

Adjusting entries. For each of the following adjusting entries, identify whether the entry is com If it is not correct, provide the correct entry in the journal on the next page and specs why the entry given below is wrong. Depreciation Expense Truck 2.800 2,800 To record depreciation on the company truck for one year. The truck's ongina cost was $12,200, with a $1,000 salvage value and an estimated life of four year b. Tax Expense Tax Receivable 500 500 The company received a property tax bill, due next month, for $500. C. SO Interest Receivable Interest Expense 50 To record one month of interest expense. The company borrowed $12.000 for two years at 5% interest. Interest is due every six months. d. 250 Prepaid Insurance Insurance Expense 250 To record one month of insurance expense. Four months ago, the company paid $3,000 for one year of insurance coverage. 3,000 e. Wages Expense Wages Payable 3,000 To record wages for December 30 and 31, 2027, to be paid on January 5, 2028. 105

Answer 1

a. The entry is correct.

b. The entry is not correct as the property tax bill is payable but not receivable. Hence, the correct entry is

Tax expense 500

Tax Payable 500

c. The entry is not correct. The interest expense is payable and the correct entry is as follows

Interest expense 50

Interest Payable 50

d. The entry is not correct. The expired portion of insurance expense should be debited.

Insurance expense 250

Prepaid Insurance 250

e. The entry is correct.