Accounting Homework

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Print by: Alfear Holmes ACC557065VA016-1146-001: Financial Accounting / Week 2 Homework: Chapter 03

*Exercise 3-7 The ledger of Villa Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared.

Debit Credit Prepaid Insurance $ 3,600 Supplies 2,800 Equipment 25,000 Accumulated Depreciation—Equipment $ 8,400 Notes Payable 20,000 Unearned Rent Revenue 9,900 Rent Revenue 60,000 Interest Expense 0 Salaries and Wages Expense 14,000

An analysis of the accounts shows the following

1. The equipment depreciates $300 per month. 2. One-third of the unearned rent revenue was recognized during the quarter. 3. Interest of $500 is accrued on the notes payable. 4. Supplies on hand total $650. 5. Insurance expires at the rate of $200 per month.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No. Date Account Titles and Explanation Debit Credit

1. Mar. 31

2. Mar. 31

3. Mar. 31

4. Mar. 31

5. Mar. 31

Page 1 of 2Exercise 3-7

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Page 2 of 2Exercise 3-7

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