Reference no: EM131824574

Question - Adjusting Entries

The ledger of Chopin 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 Revenue 6,300

Rent Revenue 60,000

Interest Expense -0-

Salaries and Wages Expense 14,000

An analysis of the accounts shows the following.

1. The equipment depreciates $250 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 $650.

5. Insurance expires at the rate of $300 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.