Question

Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information:

November 30 December
Debit Credit Debit Credit
Supplies $1,550 $3,050
Prepaid Insurance 6,200 $4,650
Salaries Payable $10,100 $15,100
Deferred Revenue 2,100 $1.050
The following information is known for the month of December:
A. Purchases of supplies during December total $3,600.
B. Supplies on hand at the end of December equal $3,050.
C. No insurance payments are made in December.
D. Insurance cost is $1,550 per month.
E. November salaries payable of $10,100 were paid to employees in December. Additional salaries for December owed at the end of the year are $15,100.
F. On November 1, a tenant paid Golden Eagle $3,150 in advance rent for the period November through January, and Deferred Revenue was credited for the entire amount.
Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.

Answer 1

December 31

Dr Supplies expense $2100

Cr Supplies $2100

December 31

Dr Insurance expense $1,550

Cr Prepaid insurance $1,550

December 31

Dr Salaries expense $15,100

Cr Salaries payable $15,100

December 31

Dr Deferred revenue $1,050

Cr Rent revenue $1,050

Step-by-step explanation:

Preparation of the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and deferred revenue on December 31.

December 31

Dr Supplies expense $2100

Cr Supplies $2100

( $1,550+3,600-$3,050= $2100)

( To record supplies expense)

December 31

Dr Insurance expense $1,550

Cr Prepaid insurance $1,550

( To record insurance expense)

December 31

Dr Salaries expense $15,100

Cr Salaries payable $15,100

( To record salaries expense)

December 31

Dr Deferred revenue $1,050

Cr Rent revenue $1,050

($3,150 x 1/3= $1,050)

( To record rent revenue)