Acc557 Financial Accounting: E3-7 The ledger of Villa Rental Agency on March 31 of the current year

Acc557 Financial Accounting

Exercise 3-7
The ledger of Villa Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared.
Debits Credits
Prepaid Insurance 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation-Equipment 8,400
Notes Payable 20,000
Unearned Rent Revenue 9,900
Rent Revenue 60,000
Interest Expense -
Wage 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 revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $650.
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. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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