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Unearned Seminar Fees has a balance of $6,500, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.
Prepaid Insurance has a balance of $6,000 for six months’ insurance paid in advance on May 1, 2019.Store equipment costing $19,840 was purchased on March 31, 2019. It has a salvage value of $400 and a useful life of six years.Employees have earned $150 that has not been paid at June 30, 2019.The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $4.50; FUTA, $0.90; Medicare, $2.18; and social security, $9.30.Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were
$1,000,000.Prepaid Rent has a balance of $5,100 for six months’ rent paid in advance on March 1, 2019.The Supplies account in the general ledger has a balance of $300. A count of supplies on hand at June 30, 2019, indicated $100 of supplies remain.The company borrowed $10,600 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 6 percent.Required:Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.

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Answer:

Dr Merchandise Inventory 500.00

Cr Cost of Goods Sold 500.00

Dr Unearned Seminar Fees 2,000.00

Cr Seminar Fees 2,000.00

Dr Insurance Expense 2,000.00

Cr Prepaid Insurance 2,000.00

Dr Depreciation Expense 810.00

Cr Accumulated Depreciation 810.00

Dr Wages Expense 150.00

Cr Wages Payable 150.00

Dr Payroll tax expense 16.88

Cr SUTA Payable 4.50

Cr FUTA Payable 0.90

Cr Medicare Payable 2.18

Cr Social Security Payable 9.30

Dr Bad Debt Expense 10,000.00

Cr Allowance for Doubtful Debts 10,000.00

Dr Rent Expense 3,400.00

Cr Prepaid Rent 3,400.00

Dr Supplies Expense 200.00

Cr Supplies 200.00

Dr Interest Expense 53.00

Cr Interest Payable 53.00

Explanation:

Journal entries for Unearned Seminar Fees

Dr Merchandise Inventory 500.00 (7000-6500)

Cr Cost of Goods Sold 500.00

(Increase in inventory on hand)

Dr Unearned Seminar Fees 2,000.00 (5000/5*2)

Cr Seminar Fees 2,000.00

(Fees earned during the period)

Dr Insurance Expense 2,000.00 (6000/6*2)

Cr Prepaid Insurance 2,000.00

(Prepaid insruance expired)

Dr Depreciation Expense 810.00 [(19840-400)/6*3/12]

Cr Accumulated Depreciation 810.00

(Deprecaition expense for the period)

Dr Wages Expense 150.00

Cr Wages Payable 150.00

(Wages accrued but not paid)

Dr Payroll tax expense 16.88

Cr SUTA Payable 4.50

Cr FUTA Payable 0.90

Cr Medicare Payable 2.18

Cr Social Security Payable 9.30

(Payroll tax expense)

Dr Bad Debt Expense 10,000.00 (1,000,000*1%)

Cr Allowance for Doubtful Debt 10,000.00

(Bad debt expense)

Dr Rent Expense 3,400.00 (5100/6*4)

Cr Prepaid Rent 3,400.00

(Prepaid rent expired during the period)

Dr Supplies Expense 200.00

(300-100)

Cr Supplies 200.00

(Supplies consumed during the period)

Dr Interest Expense 53.00 (10600*6%*1/12)

Cr Interest Payable 53.00

(Interest accrued but not paid)

The Balance in Prepaid Rent is :

5100 - 3400 = 1700

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