Accounting Confessed

Poet — Thu, 03 Sep 2009 19:55:41 GMT

The ledger of Piper Rental Agency on March 31 of the current year includes the following
selected accounts before adjusting entries have been prepared.
                                       Debit                           Credit
Prepaid Insurance          3,600
Supplies                           2,800
Equipment                      25,000
Accumulated
Depreciation—Equipment                                    $ 8,400
Notes Payable    20,000                                                                                                                                                              Unearned rent                                                        9,000
Rent Revenue                                                       60,000
Interest Expense                                 –0–
Wages Expense                                 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 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.

RE: Accounting Confessed

URI93 — Thu, 03 Sep 2009 22:56:33 GMT

Poet, there are many out here who could answer your homework problem for you, but what would you be learning if we did? Accounting is a step-by-step process, and if you fail, along the way, to understand each entry and how it relates to other entries, you will soon become more confused. As you get further along in your courses, it will be harder and harder for you to understand. Accounting is very difficult and there is virtually no memorization, only understanding the processes of financial statements. I wish you good luck on getting through this.