I have just completed an adjusted entry and would like to see if it is correct, it is my first try: The problem is:1. insurance expires at the rate of 400. A month
2. a count 08/31 shows 600. Supplies on hand
3. annual depreciation is 6000. On cottages and 24000. On furniture.
4. unearned rent of 4100. Was earned prior to 08/31
5. salaries of 400. Were unpaid at 08/31
6. rentals of 1000. Were due from tenants at 08/31 (use accounts recievable)
7. mortgage interest rate is 9% per year (mortgage taken out 08/01 for 80000.)

This company opened in June renting 8 units.trial balance done 08/31.
Adjusted General Journal I got:
GENERAL JOURNAL


Date Account Titles and Explanation P. R. Debit Credit
08/31/10 Insurance Expense 722 1200
Prepaid Insurance Insurance 130 1200

08/31/10 Supplies on hand 126 600
Supplies Expense 631 600

08/31/10 Depreciation Expense 620 cottage 1500
Accumulated depreciating cottage 144 1500
cottage

08/31/10 Depreciation Expense furniture 621 600
Accumulated Depreciation furniture 150 600


08/31/10 Accounts Recivable 112 1000
Revenue earned ue earned 429 1000

08/31/10 Interest Expense 718 600
Interest Payable 230 600

08/31/10 Unearned Rent 208 4100
Rent Revenue 429 4100

08/31/10 Salaries Expense 726 1200
Salaries Payable 212 1200
I read something you wrote about a closing entry on prior Q&A not sure what that is, my intrctions didn't specify that, is it always a part of adjusting in the adjusting general jouranal process? My next step will be to take this and prepare a ledger. I was given this assignment from my team captain last night (only got the chapter to learn from Tuesday!)

This is mostly pretty good. A couple of comments though. First, columns don't post. I'm going on the assumption that you listed the debits first like you were supposed to. If you did not, that would change whether some of them are correct.

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08/31/10 Accounts Recivable 112 1000
Revenue earned ue earned 429 1000

08/31/10 Unearned Rent 208 4100
Rent Revenue 429 4100

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Be careful of account names. Notice on the unearned adjustment that you are using "Rent Revenue," which is a correct name. On the other one you are just using this generic "revenue earned ue earned." I don't even know what the "ue" stands for, but you're describing it instead of using the account name. This company rents - therefore their income is Rent Revenue, just like with the second entry here. Those are both the same accounts. So the first entry needs to be Rent Revenue as well. The concept is there - just be careful of the account names.

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08/31/10 Supplies on hand 126 600
Supplies Expense 631 600

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Again, watch the account names. "Supplies on hand" isn't an account - it's describing something. This one is also just incorrect all the way around. For one thing, expenses are always debits so you've got it backwards. Second, it's the wrong dollar amount. Supplies are recorded as an asset when they are purchased and they sit there until you make an adjustment to remove the portion that is used and expense it. By debiting the expense, you recognize the portion used. And by crediting the Supplies, you remove the portion from the asset used. $600 is not used. That's what is left. "On hand" means what you currently have. You are not attempting to make an entry to show what is on hand, because it's already included in the account balance of Supplies. i.e. you buy $100 worth, debit supplies the $100, you use $60, so you credit $60 out of the account to get rid of them (and debit the expense $60 as well), and that leaves you with the $40 you have on hand. The "on hand" is already part of the balance you had, not in addition to it. The part they are giving you is the balance you want to leave in the account. You now have to figure out how much was used.

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I read something you wrote about a closing entry on prior Q&A not sure what that is, my intrctions didn't specify that, is it always a part of adjusting in the adjusting general jouranal process?

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No. Closing and adjusting are two entirely different things. The only thing they have in common is that they are part of the period-end processing. It's probably in a separate chapter, where they'll continue with adjusting entries and introduce the worksheet and closing entries. But there are steps in between these. Even once you learn it, you don't do it unless the instructions tell you to do so.

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Originally Posted by morgaine300

This is mostly pretty good. A couple of comments though. First, columns don't post. I'm going on the assumption that you listed the debits first like you were supposed to. If you did not, that would change whether some of them are correct.



Be careful of account names. Notice on the unearned adjustment that you are using "Rent Revenue," which is a correct name. On the other one you are just using this generic "revenue earned ue earned." I don't even know what the "ue" stands for, but you're describing it instead of using the account name. This company rents - therefore their income is Rent Revenue, just like with the second entry here. Those are both the same accounts. So the first entry needs to be Rent Revenue as well. The concept is there - just be careful of the account names.




Again, watch the account names. "Supplies on hand" isn't an account - it's describing something. This one is also just incorrect all the way around. For one thing, expenses are always debits so you've got it backwards. Second, it's the wrong dollar amount. Supplies are recorded as an asset when they are purchased and they sit there until you make an adjustment to remove the portion that is used and expense it. By debiting the expense, you recognize the portion used. And by crediting the Supplies, you remove the portion from the asset used. $600 is not used. That's what is left. "On hand" means what you currently have. You are not attempting to make an entry to show what is on hand, because it's already included in the account balance of Supplies. i.e. you buy $100 worth, debit supplies the $100, you use $60, so you credit $60 out of the account to get rid of them (and debit the expense $60 as well), and that leaves you with the $40 you have on hand. The "on hand" is already part of the balance you had, not in addition to it. The part they are giving you is the balance you want to leave in the account. You now have to figure out how much was used.



No. Closing and adjusting are two entirely different things. The only thing they have in common is that they are part of the period-end processing. It's probably in a separate chapter, where they'll continue with adjusting entries and introduce the worksheet and closing entries. But there are steps in between these. Even once you learn it, you don't do it unless the instructions tell you to do so.

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Thank you I responded at the agree /diagree part.I hope that was appropriate.

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Originally Posted by rubystensrud

Thank you I responded at the agree /diagree part.I hope that was appropriate.

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Yes... more appropriate than what some people do with it. ;) Thanks.