Answer:
insurance expense 195 debit
prepaid insuance 195 creditç
supplies expense 400 debit
supplies 400 credit
rent revenue 1,250 debit
unearned revenue 1,250 credit
depreciation expense 800 debit
accumualted depreciation office equipment 800 credit
salaries expense 1,400 debit
slaries payable 1,400 credit
Explanation:
We should record the expense for the expired months considered the total value of the contract:
Months from October1st to Dec 31th: 3
2,340 x 3 months/ 36 months = 195
We should sovle for the difference which is the amount used/consumed
500 begining - 100 ending = 400 consumed supplies
we actually earned only 2 months of rent (Nov and Dec) so we should decrease the rent reveneu account:
3,750 / 3 = 1,250
we record the depreciation which is given to us
the accrued salares means we aren't paying them right away thus, we have a liability and an expense.