The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
| Debit |
Credit |
Prepaid Insurance
|
$3,600 |
| Supplies |
2,800 |
| Equipment |
25,000 |
Accummulated
|
|
|
Depreciation-Equipment
|
|
$8,400
|
Notes Payable
|
|
20,000
|
Unearned Rent Revenue
|
|
9,900
|
Rent Revenue
|
|
60,000
|
Interest Expense
|
-0-
|
|
Wages Expense
|
14,000
|
|
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on the hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.