Accounting-Adjusting Journal Entries

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Accounting

Accounting

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• 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.

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Types of Adjustments

Prepayments:

Prepaid Expenses

Unearned Revenues

Depreciation

Accruals:

Accrued Revenues

Accrued Expenses

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Prepayments

Types of Adjustments:

Prepaid Expenses

Unearned Revenues

Depreciation

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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.

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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.

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Prepaid Expense

Adjusting Journal Entry

December 31, 2006 Adjusted the amount of rent used during the period between June 30 and December 31.

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Prepaid Expenses

Adjusting Ledger Entries

December 31, 2006 Adjusted the amount of rent used during the period between June 30 and December 31.

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Unearned Revenue

Original Journal Entry

June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next year by a breeder.

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Unearned Revenue

Original Ledger Entries

June 28, 2006 Received $5,000 cash for two bulldogs to be delivered within the next year by a breeder.

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Unearned Revenue

Adjusting Journal Entry

December 31, 2006 Record revenues earned during the

past six months. One of the bull doges was delivered by the breeder

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Unearned Revenue

Adjusting Ledger Entries

December 31, 2006 Record revenues earned during the past six months. One of the bull doges was

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Depreciation

Original Journal Entry

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

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Depreciation

Original Ledger Entries

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

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Depreciation

Adjusting Journal Entry

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.

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Depreciation

Adjusting Ledger Entries

December 31, 2006 Record depreciation for office

equipment. Time period is June 6, 2006 to December 31, 2006. Love Thy Pet Inc,. uses the straight-line method of depreciation.

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Accruals

Types of Adjustments:

Accrued Revenues

Accrued Expenses

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Accrued Revenue

Original Journal Entry

June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The note is for 1 year and has an interest

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Accrued Revenue

Original Ledger Entries

June 1, 2006 The Hatfield Company borrowed $10,000 for Love Thy Pet Inc,. The note is for 1 year and has an

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Accrued Revenue

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.

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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.

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Accrued Expense

Salary Expense Calendar for December

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25 Pay Day 24 23 22 21 20 19 18 17 16 15 14 13 12 11 Pay Day 10 9 8 7 6 5 4 3 2 1 SAT FRI THUR WED TUE MON SUN

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Accrued Expense

Adjusting Journal Entry

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?

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Accrued Expense

Adjusting Ledger Entries

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?

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Data from original entries and date for adjusting entries.

• January 31, 2006 Marie purchased a two-year insurance policy costing $2,400 that will expire January 31, 2008.

• December 31, 2007 record the use of the insurance policy up to December 31, 2007.

• January 5, 2006 Marie purchased pet store equipment for $7,500 in cash. • February 1, 2006 Marie purchased and placed into use pet store equipment

for $30,000 and took out a $50,000 note with terms of 1 year at 6%. • December 31, 2006 Accrue interest on notes payable.

• December 31, 2006 record depreciation on pet store equipment. Straight

Additional Information that can be used to practice adjusting entries. Use this information to practice adjusting entries not

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