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The ledger of Welch Rental Agency Inc
The ledger of Welch Rental Agency Inc. on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated
Depreciation - Equipment $ 8,400
Notes Payable 20,000
Unearned Rent 12,000
Rent Revenue 60,000
Interest Expense -0-
Wages Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $300 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $1,100.
5. Insurance expires at the rate of $200 per month.
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. Must use excel spreadsheet format.
Expert Solution
Please see the attached file in Excel.
Now that I'm done, it might be a good idea to insert a date column at the left and show March 31 for each entry.
Journal Entry Debit Credit
Depreciation expense 900
Accumulated depreciation - equipment 900
To record three months of depreciation at $300 per month.
Unearned rent 4000
Rent revenue 4000
To report the earned portion of the unearned rent as of the end of the
quarter
Interest Expense 500
Interest payable 500
To accrue interest expenses on the note payable for the quarter.
Supplies expense 1700
Supplies 1700
To expense the amount of supplies used during the quarter
Insurance Expense 600
Prepaid insurance 600
To expense insurance as used at $200 per month
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