What the adjusting journal entry would include a

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Problem 1: Devan Co. began the year with $1,200 in office supplies. During the year, Devan purchased $2,800 worth of additional supplies. At the end of the year, Devan only had $500 worth of supplies remaining. What adjusting entry must Devan make at year end?

Option 1: Debit: Supplies Expense, $3,500; Credit: Supplies, $3,500
Option 2: Debit: Supplies, $3,500; Credit: Supplies Expense, $3,500
Option 3: Debit: Supplies, $2,100; Credit: Supplies Expense, $2,100
Option 4: Debit: Supplies Expense, $2,100; Credit: Supplies, $2,100

Problem 2: On March 1, 2020, Jimenez purchased a one-year insurance policy for $2,400. On that date, Jimenez debited Prepaid Insurance for $2,400. If Jimenez prepares financial statements at the end of March, the adjusting journal entry would include a:

Option 1: debit to Insurance Expense for $200.
Option 2: debit to Insurance Expense for $2,400.
Option 3: credit to Insurance Expense for $2,200.
Option 4: None of these.
Option 5: credit to Prepaid Insurance for $2,200.

Reference no: EM132915039

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