Question 3 - Adjusting journal entries (8 marks)

It is now the end of the financial year (30 June 2021) and Sandy Smith has asked you to assist the business with completing the adjusting journal entries for the following transactions. For each of these transactions you are only required to prepare the adjusting journal entry on 30 June 2021.

1. On March 1, 2021 the business bought Office furniture for $5,000. The business will use this furniture for 4 years after which it will be sold for $200.

2. On April 1, 2021 the business paid rent in advance for the next 8 months. The total amount that was paid was $16,000. On this date (April 1) Prepaid rent was debited and Cash at Bank was credited.

3. On June 28, 2021 the business rendered services for a client.However, by the end of the financial year Sandy Smith has not had a chance yet to invoice the client for the total amount of $3,200.

4. Outstanding salaries and wages to staff members which have not been recorded or paid yet by June 30, 2021 amounted to $6,000.

Required:

You need to prepare the adjusting journal entries on June 30, 2021.

General Journal - "Aussie Eatery"

Date	Details	Debit ($)	Credit ($)
30 June 2021	Depreciation expense - Office Furniture	600
	Accumulated depreciation - Office Furniture		600
	Depreciation for 6 months = (5000 - 200)/4/12*6= $600
30 June 2021