exercise 3.5 - P3-5 2007 Dec 31 Supplies Expense Office...

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Unformatted text preview: P3-5 2007 Dec. 31 Supplies Expense Office Supplies To record office supplies used ($129 + $480 - $174). Prepaid Rent Rent Expense To recognize unexpired rent ($3,600 x 1/12). 435 435 31 300 300 P3-5 (continued) Dec. 31 Discount on Notes Payable* Interest Expense To recognize unexpired interest ($1,200 x 2/12). Depreciation Expense Accumulated Depreciation: Buildings Accumulated Depreciation: Store Equipment Accumulated Depreciation: Office Equipment Buildings: $(100,000 - 8,000) 20 Store Equipment: $(65,000 - 2,000) 10 Office Equipment: $(15,000 - 1,500) 10 x 8/12 Interest Expense Interest Payable ($12,000 x 12% x 8/12). Insurance Expense Prepaid Insurance To record expired insurance ($720 3 x 7/12). Interest Receivable Interest Revenue To record earned but uncollected interest revenue ($7,000 x 10% x 5/12). Rent Revenue Unearned Rent To record unearned rent ($960 x 5/8). Travel Expenses Advances to Sales Personnel 200 200 31 11,800 4,600 6,300 900 31 960 960 140 140 31 31 292 292 31 600 600 31 787 787 To record travel expenses incurred by sales personnel. 31 Property Tax Expense Property Tax Payable To record property tax expense for the year. 2,300 2,300 P3-5(continued) Dec. 31 Utility Expense Utilities Payable To record unpaid utility bill. Salaries Expense Salaries Payable To record accrued salaries. Income Tax Expense Income Taxes Payable To record income tax liability on current earnings ($27,749 - 435 + 300 + 200 11,800 - 960 - 140 + 292 - 600 - 787 2,300 - 302 - 927 = $10,290 x 30% = $3,087). 302 302 927 927 3,087 3,087 31 31 *Note to Instructor: Students may erroneously debit an asset account such as Prepaid Interest. It should be made clear that the Discount on Notes Payable account is a contra-liability account to Notes Payable. This is discussed more fully in Chapter 13. ...
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exercise 3.5 - P3-5 2007 Dec 31 Supplies Expense Office...

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