The ledger of Casper Consulting at January 31, 2015 includes the following selected accounts:

                                                   Debit                                                    Credit

Prepaid insurance                     $   3,600

Supplies                                         1,800

Building                                      100,000

Land                                            60,000

Notes payable                                                                                           $90,000

Unearned service revenue                      8,000

Casper’s accountant is inexperienced, and he would like your help in preparing the company’s January 31, 2015 financial statements. He has provided you with the following information:

1. A one-year insurance policy costing $3,600 was purchased on January 1, 2015. At that time the full amount was debited to prepaid insurance.

2. A physical inventory count on January 31, 2015 revealed $800 in supplies were still remaining.

3. Land and building were purchased on January 1, 2015 at a cost of $160,000. The building has an expected useful life of 20 years. The purchase was financed by paying $70,000 in cash and the balance on a 2-year, 8% note payable. Interest for the month of January was $600.

4. Unearned service revenue related to a client retainer paid on January 15, 2015. On January 31, 2015, half of this amount has been earned.

5. Fees earned but unbilled for the month of January amounted to $5,000

6. A bill from Bell Telephone was received on January 29^th and was unrecorded on January 31, 2015. $750 of the bill related to January telephone charges and $125 related to internet fees for February.

Required:

Prepare the adjusting journal entries required at the month-end January 31, 2015.

Answer rating: 100% (QA)

Date General Journal Debit Credit Jan 31 Insurance expense 360012 300 Prepaid insurance 300 ... View the full answer