[samanthafulton]

I'm trying to adjust an entry for supplies and I was wondering if I have the correct accounts in doing so.

The actual journal entry is

Supplies 35,000
Accounts Payable 35,000

Now I have this for the adjusting entry:

Supplies Expense 30,000
Supplies 30,000

The problem was:

Additional office supplies $35,000 were purchased on account and as of 12/31/05 $5,000 of those supplies were still on hand.

[pready]

Your Adjusting Entry is correct.

[samanthafulton]

Thank you pready

[samanthafulton]

Would the adjusting entry for loaning out money in a note be the following?

Journal entry:

Cash 159,000
Accounts Payable 159,000

Adjusting entry:

Note Receivable 159,000
Long-Term Notes payable 159,000

[pready]

If you loned money to another organization the journal entry will be:
Debit Accounts Receivable for the amount
Credit Cash for the amount.

The Adjusting entry will be to compute the interest earned for the period. To compute the interest the formula is: Principle X Rate X Time = Interest.
For example you loaned $1,000 for 1year at 12% interest on June 1.

To compute the interest revenue due at 31 Dec the computation is:
$1,000 X 12% X 7/12 = $70. This is interest that is owed to you.

The adjusting entry to record this is:
Debit Interest Receivable for $70
Credit Interest Revenue for $70

If your orgainiation signs a note, which means you owe another organization money then the journal entry is:
Debit Asset received for the amount i.e. Equipment, Cash, Inventory, etc...
Credit Notes Payable for the amount.

For the adjusting entry using the example above, you owe another company $70 interest, then the adjusting entry is:
Debit Interest Expense for $70
Credit Interest Payable for $70

[samanthafulton]

OK now I've got one last question to check for this assignment.
I have unearned consulton revenue of 36,000 received in cash on September 1, 2005. The contract has a six-month term. The companies policy is to record the entire revenue when received in the consulting revenue account.

Now the transaction that I posted in the journal is this:

Cash 36,000
Unearned consulting revenue 36,000

Would there be an adjusting entry for this or is this the only journal entry that I need to make?

[pready]

The adjusting entry to record the earned revenue is:

Debit Unearned Revenue Account for the amount
Credit the Revenue Accunt for for the amount

[samanthafulton]

Thank you for helping me pready!