Question 1 The ledger of Whispering Winds Corp on July 31 20

Question 1 The ledger of Whispering Winds Corp. on July 31, 2017, includes the selected accounts below before adjusting entries have been prepared. Debit Credit Investment in Note Receivable Supplies Prepaid Rent Buildings Accumulated Depreciation Buildings Unearned Service Revenue $24,000 20,000 4,600 220,000 $150,000 11,600 An analysis of the company\'s accounts shows the following. I. The investment in the notes receivable earns interest at a rate of 6% per year. 2. Supplies on hand at the end of the month totaled $18,000 3. The balance in Prepaid Rent represents 4 months of rent costs. 4. Employees were owed $3,400 related to unpaid salaries and wages. 5. Depreciation on buildings is $6,720 per year. 6. During the month, the company satisfied obligations worth $4,750 related to the Unearned Services Revenue. 7. Unpaid maintenance and repairs costs were $2,150

Solution

Journal entry :

Date	accounts & explanation	debit	credit
July 31	Interest receivable (24000*6%*1/12)	120
	Interest revenue		120
	(To record accured interest)
July 31	Supplies expense (20000-18000)	2000
	Supplies		2000
	(To record supplies adjusted)
July 31	Rent expense (4600/4)	1150
	Prepaid rent		1150
	(To record rent expense)
July 31	Salaries and wages expense	3400
	Salaries and wages payable		3400
	(To record salary and wages)
July 31	Depreciation expense (6720/12)	560
	Accumlated depreciation-building		560
	(To record depreciation expense)
July 31	Unearned service revenue	4750
	Service revenue		4750
	(To record service revenue)
July 31	Maintenance and repairs expense	2150
	Maintenance and repairs payable		2150
	(To record expense)