The ledger of Chan Rental Agency 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 depreciates $188 per month.
2. One-third of the unearned rent was recognised as revenue during the quarter.
3. Interest of $375 is accrued on the notes payable.
4. Supplies on hand total $637.
5. Insurance expires at the rate of $225 per month.

Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and SuppliesExpense.

Transcribed Image Text:

Debit Credit $ 2,700 2,100 18,750 Prepaid Insurance Supplies Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Rent Revenue Rent Revenue Interest Expense Salaries and Wage Expense $ 6,300 15,000 6,975 45,000 10,500