Prepare Adjusting Entries for the Following Transactions

question 109

Essay

Prepare adjusting entries for the following transactions. Omit explanations.
1. Depreciation on equipment is $800 for the accounting period.
2. There was no beginning balance of supplies and purchased $500 of office supplies during the period. At the end of the period $80 of supplies were on hand.
3. Prepaid rent had a $1,000 normal balance prior to adjustment. By year end $600 was unexpired.

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Definitions:

Fiscal Year

A twelve-month period used for accounting and financial reporting purposes, which may or may not align with the calendar year.

Effective Interest Rate Method

A method of amortizing the discount or premium on bonds payable that reflects the constant rate of interest over the life of the bond.

Amortization Schedule

An Amortization Schedule is a table detailing each periodic payment on an amortizing loan, including the amount of principal and the amount of interest that comprises each payment until the loan is paid off at the end of its term.

Bond Carrying Amount

The net value of a bond on a balance sheet, which may differ from its face value due to amortization or market changes.