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Ch7 - E 7-10 Making Adjusting Entries a Office Supplies...

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E 7-10 Making Adjusting Entries a. Office Supplies Expense 5,000 Office Supplies 5,000 To record supplies used ($1,400 + $4,500 – $900 = $5,000). b. Interest Receivable 450 Interest Revenue 450 To record interest revenue for three months ($15,000 × .12 × 3/12 = $450). c. Depreciation Expense 18,000 Accumulated Depreciation 18,000 To record depreciation expense for the period ($600,000 × 3/5 = $360,000; $360,000/20 years = $18,000). d. Interest Expense 750 Interest Payable 750 To record interest expense for six months ($15,000 × .10 × 6/12 = $750). e. Unearned Rent Revenue 15,000 Rent Revenue 15,000 To record rental revenue for ten months ($18,000 × 10/12 = $15,000). E 7-11 Making and Analyzing Adjusting Entries a. 3/31 Prepaid Rent 24,000 Cash 24,000 To record prepayment of rent for one year. 12/31 Rent Expense 18,000 Prepaid Rent 18,000 To record rent expense for nine months ($24,000 × 9/12 = $18,000). b. 1/31 Cash 150,000 Bank Loan Payable 150,000 To record $150,000, 12%, one-year loan. 12/31 Interest Expense 16,500 Interest Payable 16,500 To record interest expense for 11 months ($150,000 × .12 × 11/12 = $16,500).
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c. 3/15 Supplies
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