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Prepare the adjusting entries for the following items at June 30: Accrued interest expense on loan payable, office supplies used, depreciation of office equipment, and unearned fees earned.

Accounting

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Here are the adjusting entries:

Adjusting Entries

  1. Interest expense accrued on loan payable

    DateDebit ($)Credit ($)June 30Interest Expense520Interest Payable520(To record accrued interest expense)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Interest Expense} & 520 & \\ \quad \quad \text{Interest Payable} & & 520 \\ \quad \text{(To record accrued interest expense)} & & \\ \end{array}

  2. Office supplies used

    • Office Supplies (initial) = $4,020
    • Office Supplies (on hand) = $560
    • Office Supplies used = 4,020−4,020 - 560 = $3,460
    DateDebit ($)Credit ($)June 30Office Supplies Expense3,460Office Supplies3,460(To record office supplies used)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Office Supplies Expense} & 3,460 & \\ \quad \quad \text{Office Supplies} & & 3,460 \\ \quad \text{(To record office supplies used)} & & \\ \end{array}

  3. Depreciation of office equipment

    DateDebit ($)Credit ($)June 30Depreciation Expense1,020Accumulated Depreciation—Office Equipment1,020(To record depreciation expense)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Depreciation Expense} & 1,020 & \\ \quad \quad \text{Accumulated Depreciation—Office Equipment} & & 1,020 \\ \quad \text{(To record depreciation expense)} & & \\ \end{array}

  4. Unearned fees earned

    • Unearned Fees (initial) = $1,100
    • Amount earned = 1,100×12=1,100 \times \frac{1}{2} = 550
    DateDebit ($)Credit ($)June 30Unearned Fees550Fees Revenue550(To record unearned fees earned)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Unearned Fees} & 550 & \\ \quad \quad \text{Fees Revenue} & & 550 \\ \quad \text{(To record unearned fees earned)} & & \\ \end{array}

  5. Prepaid rent expired

    • Prepaid Rent (initial) = $2,100
    • Covers 3 months (June, July, August)
    • Monthly rent expense = \frac{\2,100}{3} = $700$
    DateDebit ($)Credit ($)June 30Rent Expense700Prepaid Rent700(To record expired prepaid rent)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Rent Expense} & 700 & \\ \quad \quad \text{Prepaid Rent} & & 700 \\ \quad \text{(To record expired prepaid rent)} & & \\ \end{array}

  6. Prepaid insurance expired

    • Prepaid Insurance (initial) = $2,730
    • Amount expired = 2,730×80%=2,730 \times 80\% = 2,184
    DateDebit ($)Credit ($)June 30Insurance Expense2,184Prepaid Insurance2,184(To record expired prepaid insurance)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Insurance Expense} & 2,184 & \\ \quad \quad \text{Prepaid Insurance} & & 2,184 \\ \quad \text{(To record expired prepaid insurance)} & & \\ \end{array}

  7. Accrued salaries expense

    DateDebit ($)Credit ($)June 30Salaries Expense1,660Salaries Payable1,660(To record accrued salaries expense)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Salaries Expense} & 1,660 & \\ \quad \quad \text{Salaries Payable} & & 1,660 \\ \quad \text{(To record accrued salaries expense)} & & \\ \end{array}

  8. Accrued telephone expense

    DateDebit ($)Credit ($)June 30Telephone Expense670Telephone Payable670(To record accrued telephone expense)\begin{array}{l r r} \text{Date} & \text{Debit (\$)} & \text{Credit (\$)} \\ \text{June 30} & & \\ \quad \text{Telephone Expense} & 670 & \\ \quad \quad \text{Telephone Payable} & & 670 \\ \quad \text{(To record accrued telephone expense)} & & \\ \end{array}
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