In General Journal Form, Record the December 31 Adjusting Entries

question 28

Essay

In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period.
a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year.
b. The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand.
c. On November 1 of the current year, Rent Earned was credited for $1,500. This amount represented the rent earned for a three-month period beginning November 1.
d. Estimated depreciation on office equipment is $600.
e. Accrued salaries amount to $400.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold, determined by the supply and demand dynamics in the open market.

Common Stock

Shares of ownership in a corporation that entitle the shareholder to vote on corporate matters and receive dividends, subject to the company's profitability.

Short-term Speculation

The practice of buying and selling assets with the intention of making quick profits from short-term fluctuations in price.

Owned Percentage

The proportion of a property or business owned by an individual or entity, typically represented as a percentage.