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Prepare the necessary adjusting entries for the following accounts at year-end: Accrued Interest Expense, Office Supplies Used, Depreciation Expense, Unearned Fees Earned, and Prepaid Rent Expired.

Accounting

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Here are the adjusting entries:

  1. Accrued Interest Expense

    Interest Expense$520Interest Payable$520(To record accrued interest expense)\begin{array}{l r r} \text{Interest Expense} & \$520 & \\ \quad \text{Interest Payable} & & \$520 \\ \textit{(To record accrued interest expense)} & & \end{array}

  2. Office Supplies Used

    • Office Supplies Used = Unadjusted Balance - Unused Supplies
    • Office Supplies Used = \4,020 - $560 = $3,460$
    Office Supplies Expense$3,460Office Supplies$3,460(To record office supplies used)\begin{array}{l r r} \text{Office Supplies Expense} & \$3,460 & \\ \quad \text{Office Supplies} & & \$3,460 \\ \textit{(To record office supplies used)} & & \end{array}

  3. Depreciation Expense

    Depreciation Expense$1,020Accumulated Depreciation - Office Equipment$1,020(To record depreciation for the year)\begin{array}{l r r} \text{Depreciation Expense} & \$1,020 & \\ \quad \text{Accumulated Depreciation - Office Equipment} & & \$1,020 \\ \textit{(To record depreciation for the year)} & & \end{array}

  4. Unearned Fees Earned

    • Unearned Fees Earned = Unearned Fees Balance ×\times Portion Earned
    • Unearned Fees Earned = \2,800 \times 0.50 = $1,400$
    Unearned Fees$1,400Fees Revenue$1,400(To record unearned fees earned)\begin{array}{l r r} \text{Unearned Fees} & \$1,400 & \\ \quad \text{Fees Revenue} & & \$1,400 \\ \textit{(To record unearned fees earned)} & & \end{array}

  5. Prepaid Rent Expired

    • Monthly Rent Expense = Prepaid Rent Balance ÷\div Number of Months
    • Monthly Rent Expense = \2,100 \div 3 = $700$
    Rent Expense$700Prepaid Rent$700(To record rent expired for June)\begin{array}{l r r} \text{Rent Expense} & \$700 & \\ \quad \text{Prepaid Rent} & & \$700 \\ \textit{(To record rent expired for June)} & & \end{array}

  6. Prepaid Insurance Expired

    • Insurance Expired = Prepaid Insurance Balance ×\times Percentage Expired
    • Insurance Expired = \2,730 \times 0.80 = $2,184$
    Insurance Expense$2,184Prepaid Insurance$2,184(To record insurance expired)\begin{array}{l r r} \text{Insurance Expense} & \$2,184 & \\ \quad \text{Prepaid Insurance} & & \$2,184 \\ \textit{(To record insurance expired)} & & \end{array}

  7. Accrued Salaries Expense

    Salaries Expense$1,660Salaries Payable$1,660(To record accrued salaries expense)\begin{array}{l r r} \text{Salaries Expense} & \$1,660 & \\ \quad \text{Salaries Payable} & & \$1,660 \\ \textit{(To record accrued salaries expense)} & & \end{array}

  8. Accrued Telephone Expense

    Telephone Expense$670Telephone Account Payable$670(To record accrued telephone expense)\begin{array}{l r r} \text{Telephone Expense} & \$670 & \\ \quad \text{Telephone Account Payable} & & \$670 \\ \textit{(To record accrued telephone expense)} & & \end{array}
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