Question

The unadjusted trial balance for Monty Corp. is shown below.

MONTY CORP.
Trial Balance
October 31, 2017
Debit Credit
Cash $15,330
Supplies 2,750
Prepaid Insurance 750
Equipment 4,760
Notes Payable $4,760
Accounts Payable 2,300
Unearned Service Revenue 1,720
Common Stock 11,510
Retained Earnings 0
Dividends 540
Service Revenue 13,360
Salaries and Wages Expense 4,000
Rent Expense 5,520
$33,650 $33,650
Assume the following adjustment data.
1. Supplies on hand at October 31 total $690.
2. Expired insurance for the month is $125.
3. Depreciation for the month is $60.
4. As of October 31, services worth $930 related to the previously recorded unearned revenue had been performed.
5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $260.
6. Interest expense accrued at October 31 is $85.
7. Accrued salaries at October 31 are $1,570.
Prepare the adjusting entries for the items above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

1.

No Entry

2.

Insurance Expense $125 (debit)

Insurance Prepaid $125 (credit)

3.

Depreciation $60 (debit)

Accumulated depreciation $60 (credit)

4.

Unearned Revenue $930 (debit)

Earned Revenue $930 (credit)

5.

Accounts Receivable $260 (debit)

Service Revenue $260 (credit)

6.

Interest expense $85 (debit)

Interest payable $85 (credit)

7.

Salaries expense $1,570 (debit)

Salaries Payable $1,570 (credit)

Step-by-step explanation:

There is no entry required for supplies on hand as this is the Ledger Account Balance.

Insurance expense is recognized out of the prepaid insurance premium.

The liability : Unearned Revenue is de-recognized and Earned Revenue is recognized when services have finally been performed.