Question

prepare adjusting journal entries for the year ended december 31 for each separate situation.
a. depreciation on the companys equipment for the year is computed to be $16,000.
b. the prepaid insurance account had a $9,000 debit balance at december 31 before adjusting for the costs of any expired coverage. an analysis of the companys insurance policies showed that $1,960 of unexpired insurance coverage remains.
c. the supplies account had a $520 debit balance at the beginning of the year, and $2,680 of supplies were purchased during the year. the december 31 physical count showed $614 of supplies available.
d. three - fourths of the work related to $13,000 of cash received in advance was performed this period.
e. the prepaid rent account had a $5,100 debit balance at december 31 before adjusting for the costs of expired prepaid rent. an analysis of the rental agreement showed that $3,140 of prepaid rent had expired.
f. wage expenses of $3,000 have been incurred but are not paid as of december 31.
journal entry worksheet
the prepaid insurance account had a $9,000 debit balance at december 31 before adjusting for the costs of any expired coverage. an analysis of the companys insurance policies showed that $1,960 of unexpired insurance coverage remains.
note: enter debits before credits.

Explanation:

Step1: Record depreciation expense

Debit Depreciation Expense - Equipment for the amount of depreciation, and credit Accumulated Depreciation - Equipment.
Debit: Depreciation Expense - Equipment $16,000
Credit: Accumulated Depreciation - Equipment $16,000

Step2: Adjust prepaid insurance

The amount of expired insurance is the beginning balance of prepaid insurance minus the unexpired insurance. So, $9,000 - $1,960=$7,040. Debit Insurance Expense and credit Prepaid Insurance.
Debit: Insurance Expense $7,040
Credit: Prepaid Insurance $7,040

Step3: Adjust supplies

The supplies used is the beginning balance of supplies plus the supplies purchased minus the ending balance of supplies. So, $520 + $2,680-$614 = $2,586. Debit Supplies Expense and credit Supplies.
Debit: Supplies Expense $2,586
Credit: Supplies $2,586

Step4: Recognize revenue from unearned revenue

Three - fourths of the $13,000 of cash received in advance was performed. So, $13,000×\frac{3}{4}=$9,750. Debit Unearned Revenue and credit Service Revenue.
Debit: Unearned Revenue $9,750
Credit: Service Revenue $9,750

Step5: Adjust prepaid rent

The expired prepaid rent is $3,140. Debit Rent Expense and credit Prepaid Rent.
Debit: Rent Expense $3,140
Credit: Prepaid Rent $3,140

Step6: Accrue wage expenses

Since wage expenses of $3,000 have been incurred but not paid, debit Wage Expense and credit Wages Payable.
Debit: Wage Expense $3,000
Credit: Wages Payable $3,000

Answer:

Transaction	General Journal	Debit	Credit
	Accumulated Depreciation - Equipment		$16,000
b	Insurance Expense	$7,040
	Prepaid Insurance		$7,040
c	Supplies Expense	$2,586
	Supplies		$2,586
d	Unearned Revenue	$9,750
	Service Revenue		$9,750
e	Rent Expense	$3,140
	Prepaid Rent		$3,140
f	Wage Expense	$3,000
	Wages Payable		$3,000