Exercise 35 The ledger of Cheyenne Rental Agency on March 31

Exercise 3-5

The ledger of Cheyenne Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.

Debit

Credit

An analysis of the accounts shows the following.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expenses. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No entry\" for the account titles and enter 0 for the amounts.)

No.

Account Titles and Explanation

Debit

Credit

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Solution

No Title Debit Credit 1 Depreciation expense ($228*3) $     684 Accumulated depreciation - Equipment $     684 (To record depreciation expense) 2 Unearned rent revenue ($4,020/3) $ 1,340 Rent revenue $ 1,340 (To record rent revenue earned) 3 Interest expenses $     490 Interest payable $     490 (to record interest accrued on note payable) 4 Supplies expense ($2,813-$649) $ 2,164 Supplies $ 2,164 (To record supplies expense) 5 Insurance expense ($324*3) $     972 Prepaid insurance $     972 (To record insurance expired)