Question

Determine the account and amount to be debited and the account and amount to be credited for the following adjustment. Equipment purchased for $65.000 on January 3, 2019. has an estimated life of 6 years and an estimated salvage value of $3.800. The firm uses the straight-line method of depreciation. Determine the adjustment for the month ended January 31, 2019. View transaction list Journal entry worksheet 1 Record adjusting entry for depreciation. Note: Enter debits before credits General Journal Debit Credit Date Jan 31, 2019 Record entry Clear entry View general journal

Answer 1

1.

Cost = 65000

Salvage = 3800

Depreciation Base = 61200

Useful life = 6 Years

Yearly Depreciation = 61200 / 6 = 10200

For one month = 10200 x 1/12 = 850

Date	General Journal	Debit	Credit
31-01-2019	Depreciation Expense A/c	850
	Accumulated Deprecaition A/c		850
	(Depreciation for a month)

2.

* Interest Expense = 17000 x 9% x 2/3 = 1020. (Notes payable from november. So 2 month should adjusted)

* Supplies used balance will transfer to expense account from asset account = used = 6110 - 1570 = 4520

* Insurance for one year = 12960 (Then should be adjsuted for 4 months from september.) = 12960 x 4/12 = 4320

* advertaisement for one year = 13680 (Then 8 month should adjusted from may) = 9120

Date	General Journal	Debit	Credit
31-12-2019	Interest Expense A/c	1,020
	Interest Payable A/c		1,020
	(interest for notes)
31-12-2019	Supplies Expense A/c	4,540
	Supplies A/c		4,540
	(reduction of Asset)
31-12-2019	Insurance Expense A/c	4,320
	Prepaid Insurance Expense A/c		4,320
	(4 month expense)
31-12-2019	Advertisement Expense A/c	9,120
	Prepaid Advertisement A/c		9,120
	(8 month expired)