Question

Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Supplies for office use were purchased during the year for $500, of which $100 remained on hand (unused) at year-end.
2. Interest of $250 on a note receivable was earned at year-end, although collection of the interest is not due until the following year.
3. At year-end, salaries and wages payable of $3,600 had not been recorded or paid.
4. At year-end, one-half of a $2,000 advertising project had been completed for a client, but nothing had been billed or collected.
5. Redeemed a gift card for $600 of services.

Answer 1

S/N Account Titles and Explanation Debit Credit

a. Supplies Expenses $400

Supplies $400

(To record the adjusting entry for supplies on hand)

b. Interest receivable $250

Interest income $250

(To record the adjusting entry for interest income)

c. Wages expenses $3,600

Wages payable $3,600

(To record the adjusting entry for wage payable)

d. Accounting revenue $1,000

($2,000 * 1/2)

Advertising revenue $1,000

(To record the service of service revenue)

e. Unearned revenue $600

Service revenue $600

(To record the entry of service revenue)