Trial balance Dec 31

Account debit credit

Cash 12,000
Accounts receivable 40,000
Notes receivable 7,000
Allowance for doubtful accounts 1800
Merchandise inventory 54000
Unexpired insurance 4,800
Furniture& equip. 125,000
Accumulated depreciation of F. & E. 15,000
Accounts payable 10,800
Common stock 44,000
Retained earnings 65,000
Sales 300,000
Cost of goods sold 131,000
Salaries expense 50,000
Rent expense 12,800

________ ________
436,600 436,600

Not yet recorded
1) Insurance expired during year 2,000

2) Estimated bad debt 1% of sales

3) Depreciation on furniture & equip.10% per year

4) Interest at 9% is receivable on note for one full year

5) Rent paid in advance 5,400 (originally charged to expense)

6) Accrued salaries at Dec, 31, 5,800


I need to know how to do the adjusting entries

How do you think you would do them?

Show what you have attempted, and then we will help you.

1)
Insurance expense 2,000
Expired insurance 2,000

2)
Bad debt expense 3,000
Allowance for doubbtfull accts. 3,000

6)
Salaries payable 5800
Salaries expense 5800

Numbers 1 and 2 are correct.

Number 6 should be:
Dr. Salaries Expense 5,800
Cr. Salaries Payable 5,800

How do YOU think you should do numbers 3, 4, and 5?

3)
Depreciation expense 12,500
Accumulated depreciation 12,500

4)
Interest expense 630.00
Interest payable 630.00

5)
Prepaid rent 5,400
Rent expense 5,400

Number 3 should be:

Furniture and equipment: 125,000
Less: Accumulated Depreciation 15,000
Net Book Value: 110,000

110,000 x .1 = 11,000

Dr. Depreciation Expense 11,000
Cr. Accumulated Depreciation 11,000


Number 4 should be:
Dr. Interest Receivable 630
Cr. Interest Revenue 630

It is a note receivable, NOT a note payable


Number 5 is correct.

Thank you

You're welcome