Carla Vista Co.'s trial balance at December 31 shows Supplies $8,780 and Supplies Expense $0. On December 31, there are $2,120 of supplies on hand. Prepare the adjusting entry at December 31.

The adjusting entry is shown below:

On December 31

Supplies expense A/c Dr $6,660

To Supplies A/c $6,660

(Being supplies account is adjusted)

The supplies expense is computed by

= Supplies balance - supplies on hand

= $8,780 - $2,120

= $6,660

We simply debited the supplies expense account and credited the supplies account for $6,660