Exercise 3-50 Prepayment of Expenses JDM Inc. made the following prepayments for expense items during 2019: Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid. Prepaid 12 months' insurance on I by paying Prepaid insurance was debited. Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019. Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.

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Answer 1

Textbook Question

Chapter 3, Problem 50E

Exercise 3-50 Prepayment of Expenses

JDM Inc. made the following prepayments for expense items during 2019:

Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid.
Prepaid 12 months' insurance on I by paying Prepaid insurance was debited.
Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019.
Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

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Answer 2

Textbook Question

Chapter 3, Problem 50E

Exercise 3-50 Prepayment of Expenses

JDM Inc. made the following prepayments for expense items during 2019:

Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid.
Prepaid 12 months' insurance on I by paying Prepaid insurance was debited.
Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019.
Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

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Answer 3

Textbook Question

Chapter 3, Problem 50E

Exercise 3-50 Prepayment of Expenses

JDM Inc. made the following prepayments for expense items during 2019:

Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid.
Prepaid 12 months' insurance on I by paying Prepaid insurance was debited.
Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019.
Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

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Answer 4

Textbook Question

Chapter 3, Problem 50E

Exercise 3-50 Prepayment of Expenses

JDM Inc. made the following prepayments for expense items during 2019:

Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid.
Prepaid 12 months' insurance on I by paying Prepaid insurance was debited.
Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019.
Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

Answer 8

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-1:

To prepare:

The journal entries for the cash payments.

Answer 13

Answer to Problem 50E

The journal entries for the cash payments are as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600

Answer 14

Explanation of Solution

The journal entries for the cash payments are explained as follows:

JDM Inc.
Journal Entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Apr. 1	Prepaid Rent	$ 6,600
		Cash		$ 6,600
		(Being amount paid for rent in advance)

b	Oct. 1	Prepaid Insurance	$ 4,200
		Cash		$ 4,200
		(Being amount paid for insurance in advance)

c	Oct. 15	Supplies	$ 5,250
		Cash		$ 5,250
		(Being supplies purchased for cash)

d	Nov. 1	Prepaid Repair and maintenance	$600
		Cash		$600
		(Being amount paid in advance)

Answer 15

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.

Requirement-2:

To prepare:

The adjusting entries at the end of the year.

Answer 20

Answer to Problem 50E

The adjusting entries at the end of the year are as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense	$ 4,950
		Prepaid Rent		$ 4,950

b	Dec. 31	Insurance Expense	$ 1,050
		Prepaid Insurance		$ 1,050

c	Dec. 31	Supplies Expense	$ 4,165
		Supplies		$ 4,165

d	Dec. 31	Repair and maintenance Expense	$100
		Prepaid Repair and maintenance		$100

Answer 21

Explanation of Solution

The adjusting entries at the end of the year are explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950
		Prepaid Rent		$ 4,950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050
		Prepaid Insurance		$ 1,050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165
		Supplies		$ 4,165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100
		Prepaid Repair and maintenance		$100
		(Being adjustment made for accrued expense)

Answer 22

Expert Solution

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)

Answer 23

Expert Solution

Answer 24

Expert Solution

Answer 25

Expert Solution

Answer 26

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period/
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period/
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period/
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period/
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period/

Requirement-3:

To Indicate:

The effect of omission of adjusting entries on the Income statement and balance sheet for the year/

Answer 27

Answer to Problem 50E

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is as follows:

#	Effect of Omission

a	Understatement of Expenses by $4950
	Overstatement of assets by $4950


b	Understatement of Expenses by $1050
	Overstatement of assets by $1050


c	Understatement of Expenses by $4165
	Overstatement of assets by $4165


d	Understatement of Expenses by $100
	Overstatement of assets by $100

Answer 28

Explanation of Solution

The effect of omission of adjusting entries on the Income statement and balance sheet for the year is explained as follows:

JDM Inc.
Adjusting entries
For the year 2019
#	Date	Account Title	Debit	Credit	Effect of Omission

a	Dec. 31	Rent Expense (6600*9/12)	$ 4,950		Understatement of Expenses by $4950
		Prepaid Rent		$ 4,950	Overstatement of assets by $4950
		(Being adjustment made for accrued expense)

b	Dec. 31	Insurance Expense (4200*3/12)	$ 1,050		Understatement of Expenses by $1050
		Prepaid Insurance		$ 1,050	Overstatement of assets by $1050
		(Being adjustment made for accrued expense)

c	Dec. 31	Supplies Expense (5250-1085)	$ 4,165		Understatement of Expenses by $4165
		Supplies		$ 4,165	Overstatement of assets by $4165
		(Being adjustment made for accrued expense)

d	Dec. 31	Repair and maintenance Expense (600*2/12)	$100		Understatement of Expenses by $100
		Prepaid Repair and maintenance		$100	Overstatement of assets by $100
		(Being adjustment made for accrued expense)