Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $800, of which $250 remained on hand (unused) at year-end. Interest of $400 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $5,100 had not been recorded or paid. At year-end, one-half of a $3,500 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $750 of services.

Question

Dylan Grant

Business

6 February, 05:46

Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Supplies for office use were purchased during the year for $800, of which $250 remained on hand (unused) at year-end. Interest of $400 on a note receivable was earned at year-end, although collection of the interest is not due until the following year. At year-end, salaries and wages payable of $5,100 had not been recorded or paid. At year-end, one-half of a $3,500 advertising project had been completed for a client, but nothing had been billed or collected. Redeemed a gift card for $750 of services.

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Answers (1)

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Destinee Estrada · Answer 1

The Adjusting entries will be as followed;

Explanation:

1) Supplies Expense Dr. 800

Cash/Bank Cr. 800

No entry for supplies in hand as they are not inventory

2) Interest receivable Dr. 400

Interest Income Cr. 400

3) Salaries Expense Dr. 5,100

Salaries Payable Cr. 5,100

4) Advertising Income Receivable (3500/2) Dr. 1,750

Advertising Income Cr. 1,750

5) Gift Received Dr. 750

Gift Income Cr. 750

In our above scenario, it is assumed that company follows accrual basis of accounting. Therefore all entries made reflect the concept of accrual accounting rather than cash accounting