For each situation, reconstruct the adjusting entry that was made to arrive at the ending balance. Assume
Question:
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 ......$5,600
Balance end of year .................. 6,400
During the year, an additional business insurance policy was purchased. A 2–year premium of $2,500 was paid and charged to Prepaid Insurance.
2. Accumulated Depreciation:
Balance beginning of year ......$85,200
Balance end of year ................... 88,700
During the year, a depreciable asset that cost $7,500 and had a carrying value of $1,600 was sold for $2,400.The disposal of the asset was recorded correctly.
3. Unearned Rent:
Balance beginning of year ......$11,000
Balance end of year ................... 15,000
Warehouse quarterly rent received in advance is $18,000. During the year, equipment was rented to another company at an annual rent of $9,000. 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 ......$42,860
Balance end of year ................... 34,760
Salaries are paid biweekly. All salary payments during the year were debited to Salaries Expense.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324312140
16th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen