Prepare Adjusting Entries for the Following Transactions

question 114

Essay

Prepare adjusting entries for the following transactions. Omit explanations.
1. Depreciation on equipment is $1,050.
2. Interest incurred and owed on a loan but not paid or recorded is $275.
3. There was a beginning balance of supplies of $120 and the company purchased $400 of office supplies during the period. At the end of the year $70 of supplies were on hand.
4. Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $400 had expired.
5. Accrued salaries at year end were $1,100.

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Definitions:

Third Party

An individual or entity that is involved in a transaction but is not one of the principal parties.

Recover Expenses

The act of obtaining reimbursement for costs that were incurred for a specific purpose or activity.

Implied Warranty

Is an assurance automatically applied by law, suggesting that a product is fit for its intended purpose and meets a basic level of quality.

Breach of Warranty

Violation of the terms of a warranty agreement, where the goods or services provided fail to meet the standards or conditions promised.