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amanDHALIWAL · Feb 2, 2007, 02:04 PM

I am preparing adjusting entries for dec 31

1) on nov 1, jay borrowed $9,000 from yorkville bank issuing a 90 day, 10% note.

2) on dec 1, jay gave laura palmer a 60 day, 12% note for $6000 on account.

I wrote: cash 9,000
n/p 9,000

2) a/r 6,000
n/r 6,000

Is this correct?

CaptainForest · Feb 3, 2007, 01:40 PM

Hello Aman,

As for number 1.

You got the correct entry for Nov. 1
Dr. Cash 9,000
Cr. N/P 9,000

At Dec. 31 though, you must adjust for accrued interest expense, how do you think you will do that?

As for number 1.
On Dec. 1, you entry would be:
Dr. N/R 6,000
Cr. Cash 6,000

Why? Because you are GIVING them cash.

At Dec. 31, you must accrue interest earned, how do you think you will do that?

Note: Add Dr. and Cr in your journal entries, it will make it easier to follow.

shaheenshah · Mar 14, 2011, 10:59 PM

Hello sir I want to ask a question fromm you.
The qustion is that.
1)office supplies on hand march 31 amount to $700.
Solve this question on adjusting entries..

pready · Mar 15, 2011, 10:30 AM

You need to know what your Office Supplies account balance is to solve this question.

For example if your Office Supplies account balance is $1,000 and your actual onhand inventory balance is $700 you will have to do an adjusting entry to bring your account balance into agreement with your actual balance. The adjusting entry will be:
Debit Office Supplies Expense for $300
Credit Office Supplies for $300

Your Office Supplies account balance is now $700 ($1,000 account balance - $300 adjusting entry)= actual account balance.