For each situation, reconstruct the adjusting entry that was made to arrive at the ending balance. Assume statements and adjusting entries are prepared only once each year.
1. Prepaid Insurance:
Balance beginning of year ..... $4,300
Balance end of year ......... 3,600
During the year, an additional business insurance policy was purchased.
A 1-year premium of $1,200 was paid and charged to Prepaid Insurance.
2. Accumulated Depreciation:
Balance beginning of year ..... $103,400
Balance end of year ........ 106,100
During the year, a depreciable asset that cost $10,700 and had a carrying value of $5,300 was sold for $6,000.The disposal of the asset was recorded correctly.
3. Unearned Rent:
Balance beginning of year ..... $ 8,000
Balance end of year ......... 12,000
Warehouse quarterly rent received in advance is $14,000. During the year, equipment was rented to another company at an annual rent of $6,000. The quarterly rent payments were credited to Rent Revenue; the annual equipment rental was credited to Unearned Rent.
4. Salaries Payable:
Balance beginning of year ..... $36,540
Balance end of year ........ 29,480
Salaries are paid biweekly. All salary payments during the year were debited to Salaries Expense.