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E4-9 Prepare adjusting entries from selected account data. The ledger...

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Accounting

E4-9

Prepare adjusting entries from selected account data.

The ledger of Howard Rental Agency on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

Debit

Credit

Supplies

$3,000

Prepaid Insurance

3,600

Equipment

25,000

Accumulated DepreciationEquipment

$8,400

Notes Payable

20,000

Unearned Rent Revenue

12,400

Rent Revenue

60,000

Interest Expense

0

Salaries and Wages Expense

14,000

An analysis of the accounts shows the following.

1.The equipment depreciates $280 per month.

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

3.Interest of $400 is accrued on the notes payable.

4.Supplies on hand total $850.

5.Insurance expires at the rate of $400 per month.

Instructions

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.

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