You are probably telling me and I still don't get it. Let me provide you with what I have as the scenario and see if that will help me.
The ledger at Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Prepaid Insurance $3,600
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
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Adjusting accounts are: Depreciation Expense, Insurance Expense, Interest Payable and Supplies Expense.
This is what I have so far and I believe I also need to do all the journal entries with explanation.
Date Accounts Title Debit Credit
March 31 Insurance Expense 600
Prepaid Expense 600
31 Supplies Expense 2,100
Supplies ($2800-700) 2,100
31 Interest Expense 500
Interest Payable 500
31 Unearned Rent 3,300
Rent revenue 3,300
31 Depreciation Expense-Equipment 1,200