Chapter 3 Adjusting Journal Entries Examples

Chapter 3 Adjusting Journal Entries Examples - interest due...

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A 1. On April 1 st , 2004 we purchase a two year insurance policy for $2400. 4/1/04 DEBIT Pre-Paid Insurance $2400 CREDIT Cash $2400 12/31/04 AJE DEBIT Insurance Expense $900 CREDIT Pre-Paid Insurance $900 2. On October 31 st , 2005 we receive $3600 for consulting services that we will perform over the next six months. 10/31/05 DEBIT Cash $3600 CREDIT Unearned Revenue $3600 12/31/05 AJE DEBIT Unearned Revenue $1200 CREDIT Revenue $1200 3. On July 31 st , 2005 we borrow $20,000 @ 8% for two years w/ interest and principal due at maturity. 7/31/05 DEBIT Cash $20000 CREDIT Notes Payable $20000 12/31/05 AJE DEBIT Interest Expense $665 CREDIT Interest Payable $655 4. We pay our employees every other Friday and the last payday was December 27 th . We have a December 31 st year end and payroll is $30,000 each time we pay. Assume a 5 day work week. 12/31/05 AJE DEBIT Wage Expense $6000 CREDIT Wage Payable $6000 5. On June 1 st , 2003 we lend $50,000 @ 10% for 1 year w/ principal and
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Unformatted text preview: interest due at maturity. 6/0 1 /03 DEBIT NR $50000 CREDIT Cash $50000 12/31/03 AJE DEBIT Interest Receivable $2919 CREDIT Interest Revenue $2919 6. We begin the year with $3,000 of supplies and purchase $10,000 more during the year. At year end we count and find that we have $1,500 left. Prepare the necessary adjusting entry. 12/31/05 AJE DEBIT Supplies Expense $11500 CREDIT Supplies $11500 7. Prepare the closing entries: SALES, EXPENSES, and DIVIDENDS. Starts year off with 0 instead of cumulative number. Not Balance Sheet Items. (make account=0 and whats left= Retained Earnings) Sales $10,000 Rent Expense $ 500 Salaries Expense $ 1,000 Tax Expense $ 900 Dividends $ 250 a. To close net income DEBIT Sales $10000 b. To close dividends DEBIT Retained Earnings $250 CREDIT Dividends $250 Adjusting Journal Entries Example...
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