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16 October, 20:14

Question 2 The ledger of Metlock, Inc. on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared. Debit Credit Supplies $3,900 Prepaid Insurance 4,680 Equipment 32,500 Accumulated Depreciation-Equipment $10,920 Notes Payable 26,000 Unearned Rent Revenue 16,120 Rent Revenue 78,000 Interest Expense 0 Salaries and Wages Expense 18,200 An analysis of the accounts shows the following. 1. The equipment depreciates $364 per month. 2. Half of the unearned rent revenue was earned during the quarter. 3. Interest of $520 is accrued on the notes payable. 4. Supplies on hand total $1,105. 5. Insurance expires at the rate of $520 per month. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly

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  1. 16 October, 22:17
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    The ledger of Metlock, Inc.

    March 31 Adjusting Entries

    Sr. No Particulars Debit Credit

    1 Depreciation Expense $1092

    Accumulated Depreciation $ 1092

    Depreciation for 3 months = $364*3 = $ 1092

    2. Unearned Rent Revenue 8060

    Rent Revenue Earned 8060

    Half of the unearned rent revenue was earned during the quarter.

    3. Interest Expense $130

    Interest Payable $ 130

    Interest of $520 is accrued on the notes payable. For the quarter it will be

    $ 520/4-=$ 130

    4. Supplies Expense 2885

    Supplies 2885

    Supplies on hand total $1,105. Supplies were $ 3900. The amount of supplies used were $ 3900 - $ 1015 = $ 2885

    5. Insurance Expense $1560

    Prepaid Insurance $ 1560

    Insurance expires at the rate of $520 per month. For the three months it would be $ 520 * 3 = $1560.
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