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Adjusting Entries
Data for original entries and date for adjusting entries.
• June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash to the rental company for the
next 12 months rent.
• December 31, 2006 Adjusted the amount of rent used during the period between
June 30 and December 31.
• June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next
year by a breeder.
• December 31, 2006 Record revenues earned during the past six months. One of the
bull doges was delivered by the breeder
• June 6, 2006 Love Thy Pet Inc,. purchased office equipment for $15,000 cash with an
estimated usefully life of 5 years. The residual value of the equipment is expected to
be $3,000.
• December 31, 2006 Record depreciation for office equipment. Time period is June 6,
2006 to December 31, 2006. Love Thy Pet uses the straight-line method of
depreciation.
• June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The
note is for 1 year and has an interest rate of 6%.
• December 31, 2006 Record the accrued interest for the Hatfield Company’s Notes
receivable. The time period is from June 1, 2006 to December 31, 2006. Use the
simple interest method.
• December 31, 2006 Two employees are paid in total $800 each bi-week to be paid
evenly over a 5 day work week. What would be the accrued expense for employees?
Types of Adjustments
Prepayments:
Prepaid Expenses
Unearned Revenues
Depreciation
Accruals:
Accrued Revenues
Accrued Expenses
Prepayments
Types of Adjustments:
Prepaid Expenses
Unearned Revenues
Depreciation
Prepaid Expense
Original Journal Entry
June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash to
the rental company for the next 12 months rent.
Prepaid Expenses
Original Ledger Entries
June 30, 2006 Love Thy Pet Inc,. paid $19,200 cash
to the rental company for the next 12 months rent.
Prepaid Expense
Adjusting Journal Entry
December 31, 2006 Record the accrued interest for the Hatfield
Company’s Notes receivable. The time period is from June 1,
2006 to December 31, 2006. Use the simple interest method.
10,000 X .06 = 600 X 7/12 = 350
Accrued Revenue
Adjusting Ledger Entries
December 31, 2006 Record the accrued interest for the Hatfield
Company’s Notes receivable. The time period is from June 1,
2006 to December 31, 2006. Use the simple interest method.
10,000 X .06 = 600 X 7/12 = 350
Accrued Expense
Salary Expense Calendar for December
20XX
SUN MON TUE WED THUR FRI SAT
1 2 3 4
Pay Day
5 6 7 8 9 10 11
12 13 14 15 16 17 18
Pay Day
19 20 21 22 23 24 25
26 27 28 29 30
Accrued Expense
Adjusting Journal Entry