Question

The ledger of Marin Inc. on March 31, 2017, includes the following selected accounts before adjusting entries.

Debit Credit
Supplies 3,970
Prepaid Insurance 2,240
Equipment 28,500
Unearned Service Revenue 11,700

An analysis of the accounts shows the following.
(1) Insurance expires at the rate of $280 per month.
(2) Supplies on hand total $965.
(3) The equipment depreciates $190 per month.
(4) During March, services were performed for two-fifths of the unearned service revenue.

Prepare the adjusting entries for the month of March.

Answer 1

Step-by-step explanation:

The adjusting entries are shown below:

1. Prepaid insurance expense A/c Dr $280

To Prepaid insurance A/c $280

(Being prepaid insurance is adjusted)

2. Supplies expense A/c Dr $3,005 ($3,970 - $965)

To Supplies A/c $3,005

(Being supplies adjusted)

3. Depreciation Expense A/c Dr $190

To Accumulated depreciation $190

(Being depreciation expense is adjusted)

4. Unearned service revenue A/c Dr $4,680 ($11,700 × 2 ÷ 5)

To service revenue $4,680

(Being unearned service is adjusted)