Problem the ledger of perez rental agency on march 31 of


Problem: The ledger of Perez Rental Agency on March 31 of the current year includes the selected accounts, shown below, before quarterly adjusting entries have been prepared.

 

Debit

Credit

Prepaid Insurance

$7,200

 

Supplies

2,800

 

Equipment

18,750

 

Accumulated Depreciation-Equipment

 

$8,400

Notes Payable

 

21,000

Unearned Rent Revenue

 

9,900

Rent Revenue

 

61,000

Interest Expenses

0

 

Salaries and Wages Expenses

18,000

 

An analysis of the accounts shows the following.

1. The equipment depreciates $300 per month.

2. One-third of the unearned rent revenue was earned during the quarter.

3. Interest totaling $525 is accrued on the notes payable for the quarter.

4. Supplies on hand total $690.

5. Insurance expires at the rate of $400 per month.

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.

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