Question: The ledger of Rainy Day Umbrella Ltd on March 31

The ledger of Rainy Day Umbrella Ltd. on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared:
An analysis of the accounts shows the following:
1, The equipment depreciation is $3 50 per month.
2. One half of the unearned rent was earned during the quarter.
3. Interest of $300 has accrued on the notes payable.
4. Supplies on hand total $950.
5. Insurance expires at the rate ofS300 per month.
Instructions
(a) 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.
(b) If the notes payable have been outstanding since January 1 of the current year, what is the annual interest rate on the note payable?


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  • CreatedSeptember 18, 2015
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