A&O Corp. had the following selected account balances as of 12/31/2012 before adjusting entries were made.
|
Cash
|
$90,000
|
|
Insurance expense
|
18,000
|
|
Accounts receivable
|
16,000
|
|
Supplies
|
6,400
|
|
Equipment
|
90,000
|
|
Accumulated depreciation
|
28,000
|
|
Unearned advertising revenue
|
5,000
|
|
Salaries expense
|
10,000
|
|
Rent expense
|
18,000
|
A&O's accountant has provided you the following information:
1. Insurance was paid in advance on 10/1/2012 for a one year period starting 10/1/2012 and the entire amount ($18k) was recorded in the insurance expense account.
2. Supplies remaining on hand at the end of the year were $3,000.
3. Equipment was purchased on 10/1/2012 and it is being depreciated over 10 years by the straight line method. The salvage value of the equipment is $0.
4. A&O has completed 50%advertising services due to clients,whose advance cash payments were recorded above.
5. Rent ($18,000) was paid in advance on 11/30/2012, for 6 months (11/30/2012 to5/31/2013) and A&O recorded the entire amount as rent expense on that date.
Prepare the adjusting journal entries for each of the 5 items above (do not write anyexplanations). Show all supporting computations. Use the answer sheet provided.