How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Mohammad Ali Your Own Question

Mohammad Ali
Mohammad Ali, Accounts & Financial Advisor
Category: Finance
Satisfied Customers: 370
Experience:  Qualified Cost & Management Accountant, with 2 years experience in Financial & Audit Services
Type Your Finance Question Here...
Mohammad Ali is online now
A new question is answered every 9 seconds

E3-7 The ledger of Piper Rental Agency on March 31 of the current

Resolved Question:

E3-7 The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.


Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated
Depreciation—Equipment $ 8,400
Notes Payable 20,000
Unearned Rent 9,900
Rent Revenue 60,000
Interest Expense –0–
Wages Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and
Supplies Expense.

Submitted: 5 years ago.
Category: Finance
Expert:  Mohammad Ali replied 5 years ago.

The adjusting entries are as follows:

For depreciation

Description

Debit ($s)

Credit ($s)

Depreciation expense

Accumulated depreciation-Equipment

To record the quarterly depreciation expense (400*3=$1200) for equipment

1200

 

1200

For un-earned rent

Description

Debit ($s)

Credit ($s)

Un-earned rent

Rent revenue

To record one third of the unearned rent, as now earned (9900/3=$3300)

3300

 

3300

For interest payable

Description

Debit ($s)

Credit ($s)

Interest expense

Interest payable

To record the quarterly accrual of interest that is payable on the notes

500

 

500

For supplies

Description

Debit ($s)

Credit ($s)

Supplies expense

Supplies

To record the quarterly usage of supplies, with a balance of (2800-2100)$700 left on account

2100

 

2100

For insurance

Description

Debit ($s)

Credit ($s)

Insurance expense

Prepaid insurance

To record the insurance expense of 200*3=$600 for the quarter, and reduce the prepaid insurance by the same amount

600

 

600

 

Mohammad Ali, Accounts & Financial Advisor
Category: Finance
Satisfied Customers: 370
Experience: Qualified Cost & Management Accountant, with 2 years experience in Financial & Audit Services
Mohammad Ali and 4 other Finance Specialists are ready to help you
Customer: replied 5 years ago.
Debit Credit
Prepaid Insurance $ 3,600 (Debit)
Supplies 2,800 (Debit)
Equipment 25,000 (Debit)
Accumulated
Depreciation—Equipment $ 8,400 (Credit)
Notes Payable 20,000 (Credit)
Unearned Rent 9,900 (Credit)
Rent Revenue 60,000 (Credit)
Interest Expense –0– (Debit)
Wages Expense 14,000 (Debit)
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and
Supplies Expense.



Sorry! I forgot to mention what was debit and what was credit on the paper.
Expert:  Mohammad Ali replied 5 years ago.

DearCustomer

Please don't worry as every expert over here is well qualified in the field of accountancy and finance. I have a lot of previous experience with such questions, and figured out what was credit and what was debit, all by myself. the answer that I have given is bascially based on the debits and credits that you have NOW provided, which, of course, I had figured out earlier. Don't worry, the answer is correct. As a rule, if you are not given the debits and credits within a question, remember that:

  1. Prepaid accounts, receivables and expenes are debit balances
  2. inventories, like supplies, merchandise are debit balances
  3. sales, revenue and un earned revenues are credit balances
  4. provisions, accruals and payables are credit balances

unless is otherwise stated. So remember these rules and you will never get your answer wrong even if you haven't been told if an item is credit or debit.

Go ahead and accept the answer. If you are unsure or dissatisfied, you may go for a second opinion, as you wish.

Thank you.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1885
    More than 5000 online tutoring sessions.
< Last | Next >
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1885
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    1853
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 8
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    CPA, CMA, CFE

    Satisfied Customers:

    1051
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    836
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    394
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    313
    NASD Licensed Rep, 1997-2001, Business Attorney