Question

E4-8 Recording Typical Adjusting Journal Entries (LO 4-1, LO 4-2, LO 4-6] Jaworski's Ski Store is completing the accounting process for its first year ended December 31, 2018. The transactions during 2018 have been journalized and posted. The following data are available to determine adjusting journal entries: 9 a. The unadjusted balance in Supplies was $900 at December 31, 2018. The unadjusted balance in Supplies Expense was so at December 31, 2018. A year-end count showed $110 of supplies on hand. b. Wages earned by employees during December 2018, unpaid and unrecorded at December 31, 2018, amounted to $4,200. The last paychecks were issued December 28; the next payments will be made on January 6, 2019. c. A portion of the store's basement is now being rented for $1150 per month to K. Frey. On November 1, 2018, the store collected six months' rent in advance from Frey in the amount of $6,900. It was credited in full to Deferred Revenue when collected. The unadjusted balance in Rent Revenue was $0 at December 31, 2018. d. The store purchased delivery equipment at the beginning of the year. The estimated depreciation for 2018 is $2,500, although none e. On December 31, 2018, the unadjusted balance in Prepaid Insurance was $3,300. Thił was the amount paid in the middle of the year for a two-year insurance policy with coverage beginning on July 1, 2018 1. Jaworski's store did some ski repair work for Frey. At the end of December 31, 2018, Frey had not paid for work completed amounting to $800. This amount has not yet been recorded as Service Revenue. Collection is expected during January 2019. Required: For each situation, prepare the adjusting journal entry that Jaworski's should record at December 31, 2018. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Following are the journal entries to be passed

Sl.No	Account titles	Debit	Credit
a	Supplies expnse	790
	Supplies		790
	(To record supplies expense)
b	Salary and wages	4200
	Salaries & wagesPayable		4200
	(To record accrues salry &wage)
c	Deferred Revenue	2300
	Rent Revenue		2300
	(To record rent for two months)
d	Depreciation	2500
	Accumlated depreciation		2500
	(To record depreciation for the year)
e	Insurnace	825
	Prepaid Insurance		825
	(To record expired portion of insurance)
f	Accounts Receivable	800
	Service Revenue		800
	(To record Service revenue)

Calculation of expired portion insurance

Total prepaid insurance for 24 months(2year) =3300

Insurance for one month =3300/24= 137.5

Insurance for 6months=137.5*6=825