Chapter 3, Problem E3.23E

Journalizing adjusting entries

Learning Objective 3

Consider the following situations for Betterton Welding Services:

1. Depreciation for the current year includes equipment, $2, 100.
2. Each Monday, Betterton pays employees for the previous week’s work. The amount of weekly payroll is $1, 400 for a seven-day workweek (Monday to Sunday). This year, December 31 falls on Thursday.
3. The beginning balance of Office Supplies was $2,300. During the year, Betterton purchased office supplies for $3,000, and at December 31 the office supplies on hand totaled $1,000.
4. Betterton prepaid a two full years’ insurance on July 1 of the current year, $6,000. Record insurance expense for the year ended December 31.
5. Betterton had earned $2,800 of unearned revenue.
6. Betterton had incurred (but not recorded) $200 of interest expense on a note payable. The interest will not be paid until February 28.
7. Betterton billed customers $3,000 for welding services performed.

Journalize the adjusting entry needed on December 31 for each situation. Use the letters to label the journal entries.