The ledger of Nash Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $3,492 Supplies 2,593 Equipment 25,040 Accumulated Depreciation-Equipment $7,743 Notes Payable 20,290 Unearned Rent Revenue 4,080 Rent Revenue 61,870 Interest Expense - 0 - Salaries and Wages Expense 15,040An analysis of the accounts shows the following. 1. The equipment depreciates $616 per month. 2. Half of the unearned rent revenue was earned during the quarter. 3. Interest of $880 is accrued on the notes payable. 4. Supplies on hand total $1,870. 5. Insurance expires at the rate of $880 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 Expenses.

Question

Seth Odonnell

Business

21 January, 07:48

The ledger of Nash Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $3,492 Supplies 2,593 Equipment 25,040 Accumulated Depreciation-Equipment $7,743 Notes Payable 20,290 Unearned Rent Revenue 4,080 Rent Revenue 61,870 Interest Expense - 0 - Salaries and Wages Expense 15,040An analysis of the accounts shows the following. 1. The equipment depreciates $616 per month. 2. Half of the unearned rent revenue was earned during the quarter. 3. Interest of $880 is accrued on the notes payable. 4. Supplies on hand total $1,870. 5. Insurance expires at the rate of $880 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 Expenses.

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Adrian Salas · Answer 1

Nash Rental Agency

The Journal General

Adjusting Entries

March 31

1. Depreciation Expense $ 1848 Dr.

Accumulated Depreciation $ 1848 Cr.

1. The equipment depreciates $616 per month. $616 * 3 = $ 1848

Unearned Revenue $ 2040

Revenue Earned $ 2040

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

= 4080/2 = $ 2040

3. Interest Expense $220 Dr.

Interest Payable $ 220 Cr.

3. Interest of $880 is accrued on the notes payable.

Interest Payable $ 880/12 * 3 = $ 220

4. Supplies Expense $ 723 Dr.

Supplies Account $ 723 Cr.

4. Supplies on hand total $1,870. $ 2593 - $ 1870 = $ 723 Supplies were used.

5. Insurance Expenses $ 2460 Dr.

Prepaid Insurance $ 2460 Cr.

5. Insurance expires at the rate of $880 per month.

Insurance Expense $880*3 = $2460 for the quarter