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The ledger of Chan Rental Agency on March 31 of the current year includes the...

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Question

Accounting

The ledger of Chan Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared:

Debit Credit
Prepaid Insurance $ 2,700
Supplies 2,100
Equipment 18,750
Accumulated DepreciationEquipment $ 6,300
Notes Payable 15,000
Unearned Rent Revenue 6,975
Rent Revenue 45,000
Interest Expense 0
Salaries and Wage Expense 10,500

An analysis of the accounts shows the following:

  1. The equipment depreciates $188 per month.
  2. One-third of the unearned rent was recognized as revenue during the quarter.
  3. Interest of $375 is accrued on the notes payable.
  4. Supplies on hand total $637.
  5. Insurance expires at the rate of $225 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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