Question

On December 1, 2021, Wolverine receives $2,400 cash from a company that is renting office space from Wolverine. The payment, representing rent for December and January, is credited to Deferred Revenue.

Wolverine purchases a one-year property insurance policy on July 1, 2021, for $11,280. The payment is debited to Prepaid Insurance for the entire amount.
Employee salaries of $1,400 for the month of December will be paid in early January 2022.
On November 1, 2021, the company borrows $7,000 from a bank. The loan requires principal and interest at 12% to be paid on October 30, 2022.
Office supplies at the beginning of 2021 total $840. On August 15, Wolverine purchases an additional $1,800 of office supplies, debiting the Supplies account. By the end of the year, $340 of office supplies remains.
Required:
Record the necessary adjusting entries at December 31, 2021, for Wolverine Company. You do not need to record transactions made during the year.

Answer 1

1) December 31, 2021, accrued rental revenue

Dr Deferred rental revenue 1,200

Cr Rental revenue 1,200

2) December 31, 2021, accrued insurance expense

Dr Insurance expense 5,640

Cr Prepaid insurance 5,640

3) December 31, 2021, accrued wages and salaries

Dr Wages expense 1,400

Cr Wages payable 1,400

4) December 31, 2021, accrued interests on notes payable

Dr Interest expense 140

Cr Interest payable 140

5) December 31, 2021, supplies expense

Dr Supplies expense 2,300

Cr Supplies 2,300

Step-by-step explanation:

the original transactions were:

1) Dr Cash 2,400

Cr Deferred rental revenue 2,400

2) Dr Prepaid insurance 11,280

Cr Cash 11,280

3) Dr Wages expense 1,400

Cr Wages payable

4) Dr Cash 7,000

Cr Notes payable 7,000

5) carrying balance of supplies $840

Dr Supplies 1,800

Cr Cash 1,800