Adjusting Journal Entries Practice Problem - Acct 2013, Mississippi State

14. Adjusting Journal Entries

in Chapter 3 (Problem 14 of 18)

Hard

Unadjusted Trial Balance December 31
	Debits	Credits
Cash	7,100
Accounts Receivable	6,200
Supplies	1,200
Accounts Payable		1,500
Notes Payable		6,000
Unearned Revenue		400
Common Stock		2,600
Retained Earnings		1,900
Dividends	600
Revenues		10,200
Salaries Expense	5,100
Rent expense	2,400
	22,600	22,600

Additional Information:

Supplies used during the year totaled $750.
Of the balance in the Unearned Revenue account, 60% had been completed.
Accrued salaries at December 31 were $900
On December 1, the company prepaid $2,400 for 4 months of rent. This transaction was recorded with a debit to Rent Expense
The note is a 6-month, 4% loan obtained from the bank on November 1.

Required:

Prepare all necessary adjusting entries as of December 31. (There are 5 of them.)
Determine Net Income for the year ending December 31.

Journal Entry 1
Supplies Expense			750
	Supplies			750

Journal Entry 2
Unearned Revenue			240
	Revenue			240

Journal Entry 3
Salary Expense			900
	Salary Payable			900

Journal Entry 4
Prepaid Rent			1,800
	Rent Expense			1,800

Journal Entry 5
Interest Expense			40
	Interest Payable			40

Net Income is 3,050