Question

On June 1, 20X1, Conner Company, a new firm, paid $4,300 rent in advance for a five-month period. The $4,300 was debited to the Prepaid Rent account. On June 1, 20X1, the firm bought supplies for $7,250. The $7,250 was debited to the Supplies account. An inventory of supplies at the end of June showed that items costing $2,950 were on hand. On June 1, 20X1, the firm bought equipment costing $44,160. The equipment has an expected useful life of 8 years and no salvage value. The firm will use the straight-line method of depreciation. Prepare end-of-June adjusting entries for Conner Company.

Answer 1

No Account and explanation Debit Credit

1. Rent expense ($4,300/5) $860

Prepaid rent $860

(To record adjusted rent expense)

2. Supplies expense (7,250-2,950) $4,300

Supplies $4,300

(To record adjusted supplies)

3. Depreciation expense $460

[(44,160/8)/12]

Accumulated depreciation $460

(To record depreciation)