Reconstructing Adjusting Entries For each situation, reconstruct the adjusting entry that was made… 1 answer below »
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Reconstructing Adjusting Entries
For each situation, reconstruct the adjusting entry that was made to arrive at the ending balance. Assume statements and adjusting entries are prepared only once each year.
1.
Prepaid Insurance:
Balance beginning of year
$5,600
Balance end of year
6,400
During the year, an additional business insurance policy was purchased. A 2–year premium of $2,500 was paid and charged to Prepaid Insurance.
2.
Accumulated Depreciation:
Balance beginning of year
$85,200
Balance end of year
88,700
During the year, a depreciable asset that cost $7,500 and had a carrying value of $1,600 was sold for $2,400.The disposal of the asset was recorded correctly.
3.
Unearned Rent:
Balance beginning of year
$11,000
Balance end of year
15,000
Warehouse quarterly rent received in advance is $18,000. During the year, equipment was rented to another company at an annual rent of $9,000. The quarterly rent payments were credited to Rent Revenue; the annual equipment rental was credited to Unearned Rent.
4.
Salaries Payable:
Balance beginning of year
$42,860
Balance end of year
34,760
Salaries are paid biweekly. All salary payments during the year were debited to Salaries Expense.
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