A contra asset account is an asset account with a

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asset account. A contra asset account is an asset account with a normal credit balance. If we refer to the rules LOADING...of debits and credits and normal balances of accounts we can see that accounts with a normal credit balance are increased with credits and decreased with debits. Go ahead and enter the depreciation adjustment for $ 1 comma 000.
Famous Cut Hair StylistsWorksheetDecember 31, 2016UnadjustedTrial BalanceAdjustmentsAccount NamesDebitCreditDebitCreditCash$ 800Office Supplies600(a)$300Equipment15,400Accumulated Depreciation—Equipment$1,000(b)1,000Accounts Payable400Interest PayableNote Payable3,600Faw, Capital7,700Service Revenue7,600Rent Expense3,200 Supplies Expense(a)$300Depreciation Expense—Equipment(b)1,000Interest Expense300 Total$20,300$20,300c. Accrued interest expense, $ 300.Remember that an accrued expense hasn't been paid for yet. Consider interest expense like we have for this adjustment. Interest accrues as time passes on the note, so the expense is said to accrue. When accruing interest expense the company increases the Interest Payable liability as well as the Interest Expense account. Referring to the rules LOADING...of debits and credits and normal balances of accounts we can see that liabilities are increased with credits and expenses are increased with debits. Go ahead and enter the interest expense adjustment.
Famous Cut Hair StylistsWorksheetDecember 31, 2016UnadjustedTrial BalanceAdjustmentsAccount NamesDebitCreditDebitCreditCash$ 800Office Supplies600(a)$300Equipment15,400Accumulated Depreciation—Equipment$1,000(b)1,000Accounts Payable400Interest Payable(c)300Note Payable3,600Faw, Capital7,700Service Revenue7,600Rent Expense3,200 Supplies Expense(a)$300Depreciation Expense—Equipment(b)1,000Interest Expense300 (c)300Total$20,300$20,300Complete the adjustments columns by calculating total debits and total credits. Remember that total debits must equal total credits.
Famous Cut Hair StylistsWorksheetDecember 31, 2016UnadjustedTrial BalanceAdjustmentsAccount NamesDebitCreditDebitCreditCash$ 800Office Supplies600(a)$300Equipment15,400Accumulated Depreciation—Equipment$1,000(b)1,000Accounts Payable400Interest Payable(c)300Note Payable3,600Faw, Capital7,700Service Revenue7,600Rent Expense3,200 Supplies Expense(a)$300Depreciation Expense—Equipment(b)1,000Interest Expense300 (c)300Total$20,300$20,300$1,600 $1,600Now we can calculate the adjusted trial balance. Each amount in these columns is computed by combining the unadjusted trial balance amounts plus or minus the adjustments. For example, if a debit balance account has a debit adjustment, add them together to get to the adjusted balance. If a debit balance account has a credit adjustment, subtract the credit from the debit and bring the result into the adjusted trial balance. Credit balances are increased by credits and decreased by debits. As always, the debit column total must equal the credit column total.Famous Cut Hair Stylists
WorksheetDecember 31, 2016UnadjustedTrialBalanceAdjustmentsAccount NamesDebitCreditDebitCreditCash$ 800Office Supplies600(a) $300Equipment15,400Accumulated Depreciation—Equipment$1,000(b)1,000Accounts Payable

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