Explanation Adjusting entries : Adjusting entries are the journal entries which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting. Prepare the adjusting entry: Date Account Title and Explanation Debit ($) Credit ($) December 31 Salaries and wages expense (+E) (-SE) 1,200 Salaries and wages payable(+L) 1,200 (To record the adjusting entry for Insurance expense) Salaries and wages expense is an expense account which is the component of stockholders’ equity. There is an increase in expense account which decreases the stockholders’ equity. Hence, debit Insurance expense with $1,200. Salaries and wages payable is a liability. There is an increase in the liability. Hence, credit salaries and wages expense with $1,200 T-account: T-account refers to an individual account, where the increases or decreases in the value of specific asset, liability, stockholder’s equity , revenue, and expenditure items are recorded...

6th Edition

ISBN: 9781260725254

Author: PHILLIPS

Publisher: MCG

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Chapter 4, Problem 22ME

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To prepare: The adjusting journal entry on December 31^st and to post the entries in the separate T-account and report the adjusted balance.

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Chapter 4, Problem 21ME

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The adjusting journal entry on December 31 st and to post the entries in the separate T-account and report the adjusted balance.

Solution Summary: The author explains that adjusting entries are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts.

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To prepare: The adjusting journal entry on December 31^st and to post the entries in the separate T-account and report the adjusted balance.

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Chapter 4 Solutions

The adjusting journal entry on December 31 st and to post the entries in the separate T-account and report the adjusted balance.

Solution Summary: The author explains that adjusting entries are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts.

Concept explainers

Videos

To prepare: The adjusting journal entry on December 31st and to post the entries in the separate T-account and report the adjusted balance.

Want to see the full answer?

Chapter 4 Solutions

To prepare: The adjusting journal entry on December 31^st and to post the entries in the separate T-account and report the adjusted balance.