Acc 280 Week 3 Exercises Essay

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E3-7 The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts 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 9,900 Rent Revenue 60,000 Interest Expense –0– Wages Expense 14,000 An analysis of the accounts shows the following. 1. The equipment depreciates $400 per month. 2. One-third of the unearned rent was earned during the quarter. 3. Interest of $500 is accrued on the notes payable. 4. Supplies on hand total $700. 5. Insurance expires at the rate of $200 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 Supplies Expense. Debit Credit March 31 Depreciation Expense $1,200 Accumulated Depreciation – Equipment 1,200 March 31 Unearned Rent 3,300 Rent Revenue 3,300 March 31 Interest Expense 500 Interest Payable 500 March 31 Supplies Expense 2,100 Supplies 2,100 March 31 Insurance Expense 600 Prepaid Insurance 600 E3-8 Andy Wright,D.D.S., opened a dental practice on January 1, 2008. During the first month of operations the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $875 of such services was earned but not yet recorded. 2. Utility expenses incurred but not paid prior to January 31 totaled $520. 3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The equipment depreciates $400 per month.

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