Question

The ledger of Kingbird, Inc. on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared. 

$$ \begin{array}{lrr}  & \text { Debit } & \text { Credit } \\ \text { Supplies } & \$ 3,690 & \\ \text { Prepaid Insurance } & 2,340 & \\ \text { Equipment } & 29,600 & \\ \text { Accumulated Depreciation–Equipment } & & \$ 8,880 \\ \text { Notes Payable } & 22,000 \\ \text { Unearned Rent Revenue } & 10,600 \\ \text { Rent Revenue } & 0 & 65,000 \\ \text { Interest Expense } & 16,000 & \\ \text { Salaries and Wages Expense } & & \end{array} $$

An analysis of the accounts shows the following. 

.1. The equipment depreciates $320 per month. 

2.  Half of the unearned rent revenue was earned during the quarter. 

3. Interest of $590 is accrued on the notes payable. 

4. Supplies on hand total $940. 

5. Insurance expires at the rate of $260 per month. 

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.

Answer 1

Adjusting entry

No	Date	General Journal	Debit	Credit
1	Mar 31	Depreciation expense (320*3)	960
		Accumulated depreciation-equipment		960
2	Mar 31	Unearned rent revenue (10600/2)	5300
		Rent revenue		5300
3	Mar 31	Interest expense	590
		Interest payable		590
4	Mar 31	Supplies expense (3690-940)	2750
		Supplies		2750
5	Mar 31	Insurance expense (260*3)	780
		Prepaid insurance		780