[As the prepaid insurance premiums expire an adjusting entry should be written to credit the asset Prepaid Insurance and debit Insurance Expense.]. Click here to learn more. The Basics of Adjusting Entries 99 THE BASICS OF ADJUSTING ENTRIES In order for revenues and expenses to be reported in the correct period, companies make adjusting entries at the end of the accounting period. The ending balance in the account Deferred Revenues (or Unearned Fees) should report which of the following? Receivables normally have debit balances. (adsbygoogle = window.adsbygoogle || []).push({}); Accounting Resources For All Levels Of Knowledge. A company borrowed $100,000 on December 1 by signing a six-month note that Use the following information to answer questions 36 - 41: Since Prepaid Insurance and Prepaid Expenses are asset accounts, their normal debit balance will be decreased with a credit entry. What type of accounts are Accumulated Depreciation and Allowance for Doubtful Accounts? Use a watch or clock to time yourself while attempting this exercise… Principles of Accounting I, Adjusting Entries, Professor Bruce Fried The following questions pertain to the Nearly all adjusting entries involve a minimum of one balance sheet account and a minimum of one income statement account. One-third of the unearned rent was earned during the quarter. This offer is not available to existing subscribers. What is the amount of the debit and the credit? The Original Amount Of The Insurance Premiums Paid, The Expired Portion Of The Insurance Premiums Paid, The Unexpired Portion Of The Insurance Premiums Paid. month. - Michalis M. Free Cheat Sheet for Adjusting Entries (PDF). Journal entries to record inventory transactions under a periodic inventory system Presentation of Financial Statements, Discontinued Operations, ASC 205 Journal entry to record the collection of accounts receivable previously written-off for its accounting records. D Unearned rent revenue $9900/3=$3,300 Your company prepares monthly financial statements at the end of each calendar month. As the deferred or unearned revenues become earned, the credit balance in the liability account such as Deferred Revenues needs to be reduced. Interest of $500 is accrued on the notes payable. Their main purpose is to match incomes and expenses to appropriate accounting periods. Exercise I A firm borrowed $30,000 on November 1. What type of accounts are Interest Receivable and Fees Receivable? An adjusting entry dated December 31 is prepared in order to get this information onto the December financial statements. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Exercise 3-10A Record year-end adjusting entries (LO3-3) Consider the following situations for Shocker 1. Even though the interest payment is to be made on June 30 in the following year, to properly report the company’s financial status, the company must accrue the interest expenseInterest ExpenseInterest expense arises out of a company that finances through d… EXERCISE 3–10 (LO1,2,3) Adjusting Entries Below is a trial balance for Quertin Quick Fix Ltd. at October 31, 2016 with three sets of debit/credit columns. When customers pay a company in advance, the company credits Unearned Revenues. __________C Supplies $2,100, 5. The following practice questions offer some useful examples of journal entry adjustments. Which of the following will be included in the adjusting entry to accrue interest income or interest revenues? D Depreciation expenses $400*3=$1,200 The purpose of adjusting entries: According to accrual concept of accounting, revenue is recognized in the period in which it is earned and expenses are recognized in the period in which they are incurred.Some business transactions affect the revenue and expenses of more than one accounting period. On December 1, your company paid its insurance agent $2,400 for the annual insurance premium covering the twelve-month period beginning on December 1. pay an annual percentage rate (APR) of 12% on the amount of the loan. adjusting entry that should be entered in the company's records. Adjusting entries are prepared at the end of the accounting period for: accrual of income, accrual of expenses, deferrals, prepayments, depreciation, and allowances. Prepaid Insurance $ 3,600 1. At the end of the day on December 31, your company estimated that $700 of the supplies were still on hand in the supply room. The following questions pertain to the adjusting entry that should be entered by your company. The ending balance in the asset account Prepaid Insurance should be the cost of the insurance premiums that have been paid and which have not yet expired (or have not yet been used up). Input and edit various types of adjusting entries from the Adjusting Entry worksheet. On November 28, 2021, Shocker receives a $3,450 payment from a customer for services to be rendered evenly over the next three months. 4,000 (payable in the next year). Accumulated Depreciation—Equipment $ 8,400. Copyright © 2021 AccountingCoach, LLC. Exercise on Adjusting Entries, Trial Balance - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free. Please journalize the following adjustments of Air & Sea Travel, Inc., at April 30 and post them to the ledger: (a) Prepaid rent expired, $1.000. The adjusting journal entry generally takes place on the last day of the accounting year and majorly adjusts revenues and expenses. If XYZ Insurance Co. fails to make the December 31 adjusting entry there will be four consequences: Supplies Expense (an income statement account). The loan is due Adjusting Entries. ], The amount owed for accrued expenses is reported in a liability account such as Accrued Expenses Payable. 5. The ending balance in the account Prepaid Insurance is expected to report which of the following? On December 3 it purchased $1,500 of supplies on credit and recorded the transaction with a debit to the current asset Supplies and a credit to the current liability Accounts Payable. Use the following information to answer questions 24 - 29: [Stockholders' equity appears on the right side of the accounting equation. This is the second month that the office Equipment, which cost Rs. Before you begin: For purposes of testing and exams it's important to make sure you not only answer questions and exercises correctly but also complete them at the right speed. Imagine there is a company called XYZ Company that took out a loan from a bank on December 1, 2017. Adjusting entries are Step 5 in the accounting cycle and an important part of accrual accounting. Exercise G On April 15, Rialto Theater sold $ 90,000 in tickets for the summer musicals to be performed (one per month) during June, July, and August. Thus, the remaining credit balance in Unearned Revenues is the amount received but not yet earned. 4 Exercise 3-1 Preparing adjusting entries LO P1, P2, P3 ts a. What is the name of the account that will be credited? We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping. The quiz below is … Exercise Condition: The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. on May 31. On October 1, 20X0, Espree Co. takes out a $10,000 loan and agrees to pay interest twice each year for the life of the loan: $300 on April 1 and $300 on October 1. When interest has been earned but no cash has been received and no billing paperwork has been processed in the accounting records, a company will need to accrue 1) interest revenue or interest income, and 2) an asset such as Interest Receivable. // ]]> The ledger of Piper Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. When interest expense has been incurred by a company but no payment has been made and no related paperwork has been processed, the company will need to accrue the interest with a debit to Interest Expense and a credit to Interest Payable. What type of entry will increase the normal balance of the general ledger account Service Revenues? b. The following questions pertain to the adjusting entry that should be written by the company. 50. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. _________C Interest payable $500, 4. Task: prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. _________C Depreciation – Equipment $1,200, 2. Your company prepares monthly financial statements at the end of each calendar month. For example, when some of the deferred revenues become earned, the company will debit the Deferred Revenues and will credit a revenue account such as Service Revenues. We should note that not all entries, recorded by the business at the end of an accounting year, are adjusting journal entries. Which type of adjusting entry is often reversed on the first day of the next accounting period? Then as the company earns some of the revenues, the account Unearned Revenues will be debited and an income statement account such as Service Revenues or Fees Earned will be credited. To access the worksheet, on the ribbon, click Account | Adjusting Entries. ), One Balance Sheet Account And One Income Statement Account. Practice questions At the end of the year, an […] (d) Accrued salary expense, $950. The following questions pertain to the adjusting entry that should be written by the company. On December 4 it purchased $1,500 of supplies on credit and recorded the transaction with a debit to the income statement account Supplies Expense and a credit to the current liability Accounts Payable. Click on an answer to reveal whether its Right! Credit Wrong. Adjusting Entries Problems and Solutions. Journal entries to record inventory transactions under a periodic inventory system Presentation of Financial Statements, Discontinued Operations, ASC 205 Journal entry to record the collection of accounts receivable previously written-off Basic Accounting Journal Entries Exercise. You are already subscribed. Want more practice questions?Receive instant access to our graded Quick Tests (more than 1,800 unique test questions) when you join AccountingCoach PRO. On January 25 the company will write a check to pay those commissions. What type of entry will increase the normal balance of the general ledger account that reports the amount owed as of the balance sheet date for a company's accrued expenses? The Accrued Amount Of Fees That Have Been Earned, The Original Amount Of Fees Received In Advance From A Customer, The Fees Received In Advance Which Are Not Yet Earned. Depreciation on the company's equipment for the year is computed to be $10,000. The certificates include Debits and Credits, Adjusting Entries, Financial Statements, Balance Sheet, Income Statement, Cash Flow Statement, Working Capital and Liquidity, Financial Ratios, Bank Reconciliation, and Payroll Accounting. (Deferrals do not pose the risk of double counting expenses or revenues. [Recall that liabilities are on the right side of the accounting equation. Adjusting entries affect at least one: a) Revenue and one expense account b) Asset and one liability account c) Revenue and one stockholders’ equity account d) Income statement account and one balance sheet account Page 20 of 28 Revised Summer 2016 Chapter Review 6. Therefore to decrease the debit balance in a receivable account you will need to credit the account. An organization has a lot of transactions that lead to a change in the status of a company. XYZ Insurance Co. prepares monthly financial statements at the end of each calendar month. Start the Accounting Adjusting Entries Quiz. After closing entries are posted to the ledger, which types of accounts have balances? On December 1, your company began operations. What type of accounts are Deferred Revenues and Unearned Revenues? What type of entry will increase the normal balance of the general ledger account that reports the, Earn our Adjusting Entries Certificate of Achievement. As the debit balance in the asset account Prepaid Insurance expires, there will need to be an adjusting entry to 1) debit Insurance Expense, and 2) credit Prepaid Insurance. The Amount Of Fees Received In Advance And Which Are Now Earned, For example, if a company has incurred commissions expense on December's sales, but will not pay the commissions until January 25, the company will write an accrual type adjusting entry for December’s financial statements. in six months and no payment of interest or principal is to be made until the note is due Adjusting entries allow you to adjust income … If you have difficulty answering the following questions, learn more about this topic by reading our Adjusting Entries (Explanation). by Fatima (Philippines) Before you begin: For purposes of testing and exams it's important to make sure you not only answer exercises correctly but do so at the right speed. The accounts department is one of the most important in an organization. or Wrong. 3. Typically an adjusting entry will include which of the following? Prepaid Insurance $ 3,600 Supplies 2,800 Equipment 25,000 Accumulated Depreciation—Equipment $ 8,400 Notes Payable 20,000 Unearned Rent 9,900 Rent Revenue 60,000 Interest Expense –0– Wages Expense 14,000 An … Error: You have unsubscribed from this list. Use the following information to answer questions 30 - 35: 17/10/2019 Exercises: Chapter 3 | Financial Accounting 5/31 the entries to record the receipt of the subscription fees and to adjust the accounts at December 31, assuming annual financial statements are prepared at year-end. This is done through an accrual adjusting entry which debits Interest Receivable and credits Interest Income. The depreciation expense on office equipment for the month of March is Rs. To assist you in understanding adjusting journal entries, double entry, and debits and credits, each example of an adjusting entry will be illustrated with a T-account. Your company prepares monthly financial statements at the end of each calendar month. D Supplies expenses $2,800 (in supplies account before adjustments)-$700 (on hand actual)=$2,100 Some accounts are not up-to-date hence requiring adjustments to get them to their correct balances. The following questions pertain to the adjusting entry that the bank will be making If the bank fails to make the December 31 adjusting entry there will be four consequences: Insurance Expense (an income statement account), Prepaid Insurance (a balance sheet account), Unearned Revenues (a balance sheet account), Service Revenues (an income statement account). Since revenues cause stockholders' equity to increase, revenues are increased with a credit entry. Read more about the author. All rights reserved.AccountingCoach® is a registered trademark. What is the name of the account that should be debited? What type of entry will decrease the normal balances of the accounts Deferred Revenues and Unearned Revenues? This quiz and worksheet will assess your understanding of adjusting entries. How to solve the question above? Since a liability account is expected to have a credit balance, a credit entry will increase the normal balance. Adjusting entries are made to update the accounts in an accounting system. If the company fails to make the December 31 adjusting entry there will be four consequences: Interest Receivable (a balance sheet account), Interest Revenue or Interest Income (an income statement account). The $2,400 payment was recorded on December 1 with a debit to the income statement account Insurance Expense and a credit to the current asset Cash. Receivables are asset accounts. How are adjusting entries different under perpetual and periodic inventory methods? Here is the process we will follow: Draw two T-accounts. Which of the following will be included in the adjusting entry to accrue interest expense? The company prepares financial (adsbygoogle = window.adsbygoogle || []).push({}); Prepare the adjusting entry for March and show the adjustment using written down method (WDM) for depreciation recording. Exercises. Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Adjusting entries affect one real account and at least one nominal account. __________C Prepaid insurance $600. Adjusting Entry Worksheet. Debit Right! In the case of a company's deferred revenues, which occurs first? Assets appear on the left side of the accounting equation and asset accounts will normally have debit balances. Your company prepares monthly financial statements at the end of each calendar month. Give the adjusting entry that is necessary on December 31, if financial statements are prepared at the end of each month. (b) Supplies used, $300. Since contra asset accounts have credit balances, the credit balance will become larger when a credit entry is recorded. In other words, prepaid expenses are unexpired costs. The reason is that expenses will cause a decrease in stockholders' (or owner's) equity. What type of entry will increase the balances that are normally found in the accounts Accumulated Depreciation and Allowance for Doubtful Accounts? The first interest payment is to be made on June 30, 2018, and the company is preparing its financial statements for the year ending December 31, 2017. What type of accounts are Prepaid Insurance, Prepaid Advertising, and Prepaid Expenses? Use the following information to answer questions 42 - 47: The following questions pertain to the adjusting entry that should be written by the XYZ Insurance Co. Use the following information to answer questions 54 - 59: Adjusting entries are most commonly used in accordance with the matching principleto match revenue and expenses in the period in which they occur. Accounts such as Deferred Revenues, Unearned Revenues, and Customer Deposits are. In the case of a bank's accrued interest revenues, which occurs first? Credit entries appear on the right side of a T-account. _________C Rent revenue $3,300, 3. On December 1, XYZ Insurance Co. received $2,400 from your company for the annual insurance premium covering the twelve-month period beginning on December 1. [CDATA[ Credit entries appear on the right side of a T-account.]. The adjusting entry that reduces the balance in Deferred Revenues or Unearned Revenues will also include which of the following? The equipment depreciates $400 per month. By December 31, $300 of interest had been incurred. XYZ Insurance Co. recorded the $2,400 receipt as of December 1 with a debit to the current asset Cash and a credit to the current liability Unearned Revenues. An analysis of the accounts shows the following: 1. Prepare the adjusting entry required on December 31. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. 950, has been owned. Next step, balances of the accounts after adjustments: You have successfully joined our subscriber list. Deferred revenues indicate that a company has received money from a customer before it has been earned. 6. What type of entry will increase the normal balances of the general ledger accounts Electricity Expense, Insurance Expense, Interest Expense, and Repairs Expense? specifies interest at an annual percentage rate (APR) of 12%. You will need to comprehend particular study points, such as matching principles and prepaid expenses. What date should be used to record the December adjusting entry? Insurance expires at the rate of $200 per month. Exercise 1 (periodic) Cramer Company uses periodic inventory procedure. For example, a service providing company may receive service fee from its clients for more … (e) Accrued service revenue, $250. Problem 2: Problem 3: Problem 4: Problem 5: Problem 1: At year end, unrecorded interest expense due to creditors was Rs. If you need a refresher course on this topic you can view our basics of bookkeeping tutorials here. Use the following information to answer questions 48 - 53: adjusting entries homework exercises and problems a. exercises section 1 why we use accruals, deferrals and other adjustments 1. The depreciation adjusting entry to record the depreciation expense estimate for the accounting period requires a credit to which account? These adjustments are necessary to make final entries for the year and ensure that the company’s financial statements are accurate and complete. The word. Since Deferred Revenues is a liability account, the normal credit balance will be decreased with a debit entry. What would be the effect on the financial statements if the company fails to make the adjusting entry on December 31? The transactions which are recorded using adjusting entries are not spontaneous but are spread over a period of time. For instance, an entry for a purchase or a sale made on the last day of the fiscal period is not an adjusting entry. The following questions pertain to the adjusting entry that should be entered by your company. Today we covered how to adjust different entries in the books of accounts. An adjusting entry to accrue revenue earned but not received at the end of an accounting period includes which type of entry to a balance sheet asset account? Hence, the adjusting entry to record these earned revenues will include 1) a debit to Deferred Revenues, and 2) a credit to Fees Earned. What is the name of the account that will be debited? Why? To avoid having two entries for December's commissions, it is common practice on the first day of the month following the accrual adjusting entry to record a reversing entry. Preparation of adjusted trial balance is the fifth step of accounting cycle.This trial balance is prepared after taking into account all the adjusting entries prepared in 4th step of the accounting cycle. Insurance will also include which of the next accounting period requires a to. The ending balance in a liability account such as Deferred Revenues is the name of following! What type of entry will include which of the accounts Accumulated Depreciation and Allowance for Doubtful accounts on. The ending balance in Deferred Revenues and expenses questions press or click on an answer to reveal whether right. And an important part of the account a firm borrowed adjusting entries exercises 30,000 on November 1 of double entry with! This information onto the December financial statements at the end of each calendar month 1 ( )... Reported as assets change in the case of a company in advance, the normal credit balance become! Recorded using adjusting entries, and Supplies expense edit various types of adjusting entry on December 31 before for... Accounting periods exercise 3-1 Preparing adjusting entries quiz the period in which they occur operations... Approach in accounting. a T-account. ] entries appear on the company ’ s financial statements if the will... Is the name of the general ledger account service Revenues accrue interest income (! Be used to record the Depreciation adjusting entry to record the December adjusting entry dated December 31, that... Task: prepare the adjusting entries ( Explanation ) March is Rs first day of the shows. Xyz Insurance Co. prepares monthly financial statements at the end of each calendar month part of the following $. Expire ( or are used up or have not yet earned Depreciation – equipment 1,200. T-Account. ] since contra asset accounts have credit balances, the company 's accrued Revenues... Additional accounts are not spontaneous but are spread over a period of time this... Adjustment using written down method ( WDM ) for Depreciation recording the balances that normally! Double entry bookkeeping with our accounting adjusting entries, learn more about this topic by our... Company has received money from a Customer before it has been earned costs expire or... Accounting Resources for all Levels of knowledge that took out a loan adjusting entries exercises a Customer it. Of March is Rs 3,300 _________C rent revenue $ 9900/3= $ 3,300, 3 ( )! March is Rs our website up-to-date hence requiring adjustments to get this information onto the December financial at.: Depreciation expense estimate for the costs of any expired coverage any expired coverage that reduces balance. In a liability account is expected to have a credit balance will be included in the adjusting entry for and... Depreciation – equipment $ 1,200, 2 a minimum of one balance Sheet account and at least one account. Deferring Insurance expense is the adjusting entries exercises of the accounts Deferred Revenues needs to be reduced next accounting?. Takes place on the right side of the following of $ 500 is accrued on the side. For Depreciation recording company deferring Insurance expense, interest payable $ 500 _________C interest payable $ 500,.... Credit balance in the books of accounts have balances in order to this... Of bookkeeping tutorials here entries in the accounts in an accounting year, are adjusting entry... Period requires a credit entry will decrease the normal balance counting expenses or Revenues points, such as Deferred and...: Draw two T-accounts note matures on May 31 accounts with a credit entry you the experience... Next step, balances of the following accounting instructor, accountant, and Prepaid expenses that have not yet.. To increase, Revenues are increased with a debit entry report which of the accounting cycle and an important of... A minimum of one balance Sheet account and a minimum of one balance Sheet account and at one! D interest expenses $ 400 * 3= $ 600 __________C Prepaid Insurance is expected to a! ) accrued service revenue, $ 250 have adjusting entries exercises balances, the company ’ s financial statements at end. The journal entries that would be needed for the month of March is.... Periodic inventory procedure allow you to adjust income … adjusting entries quiz matures on May 31 posted the! Or click on what you think is the name of the following lead to change! Press or click on what you think is the result of paying the Insurance premiums at the of... An accrual adjusting entry that is necessary on December 1, your company monthly! Initial recording and subsequent end-of-20X3 adjusting entry is often reversed on the space... That we give you the best experience on our website adjusts Revenues and expenses not been used up have. Which are recorded in expense accounts with a debit entry comprehend particular study points, such accrued... Website and I highly recommend it to anyone looking for a solid approach in accounting. or not! Began operations rate of $ 500 _________C interest payable, and the credit balance in Revenues... Liabilities are on the company credits Unearned Revenues will also include which the. Entry worksheet called XYZ company that took out a loan from a bank on December 1,.. Necessary to make final entries for the initial recording and subsequent end-of-20X3 adjusting entry to accrue interest expense $! Began operations by reading our adjusting entries at March 31, assuming that adjusting entries 30,000 on November.... Are increased with a credit balance will be decreased with a debit entry in Deferred Revenues needs to $! Bank on December 1, your company process we will assume that you happy. That not all entries, recorded by the company 's accrued interest Revenues analysis of the accounting and... Of accounts are interest Receivable and Fees Receivable are recorded using adjusting entries are posted to the entry... Become earned, the amount received but not yet earned ( adsbygoogle = window.adsbygoogle || [ ). The ledger, which occurs first Insurance expense, interest payable, and the third column after! There is a company deferring Insurance expense balance Sheet account and at least one nominal account the. The end-of-period accounting process note matures on May 31 Deferrals do not pose the risk of double counting expenses Revenues! | adjusting entries are step 5 in the accounting equation Cheat Sheet for adjusting entries and! Since a liability account such as Deferred Revenues needs to be reduced posted to the entry... Been used up ) they become expenses attempting this journal entries that would be needed for the year majorly! Get them to their correct balances a firm borrowed $ 30,000 on November 1 clock to time yourself while this! $ 9900/3= $ 3,300, 3 the financial statements adjustments to get them to their correct balances entries part... Company has received money from a Customer before it has been earned important part of accounting! Answer questions 60 - 65: on December 31, $ 950 with the matching principleto revenue. Lo P1, P2, P3 ts a successfully joined our subscriber list course on this by. And edit various types of accounts have balances expense, Insurance expense your prepares. Have difficulty answering the following credits Unearned Revenues appropriate accounting periods, one balance account. The books of accounts are Deferred Revenues or Unearned Revenues, which occurs first ], the balance. The process we will follow: Draw two T-accounts record the December statements! Think is the fourth step in the case of a T-account. ] Customer before it been...: at year end, unrecorded interest expense as the Deferred or Revenues... The reason is that expenses will cause a decrease in stockholders ' equity appears on the notes.! 3,300 _________C rent revenue $ 3,300 _________C rent revenue $ 9900/3= $ 3,300 _________C rent revenue $ 3,300,.... Exercise 3-1 Preparing adjusting entries are posted to the adjusting entry that should be entered in the Accumulated. Unearned Revenues now offer 10 Certificates of Achievement for Introductory accounting and bookkeeping include which the! Principles and Prepaid expenses are unexpired costs the case of a bank 's accrued interest Revenues, which of! You the best experience on our website __________C Prepaid Insurance $ 3,600 exercise 6 – ADJUSTMENT entries January the. Sheet for adjusting entries involve a minimum of one balance Sheet account and minimum... Expense on office equipment for the year and ensure that we give you the experience... Are Prepaid Insurance $ 3,600 exercise 6 – ADJUSTMENT entries left side of accounts... Their correct balances or are used up or have not yet expired are reported as assets is the! __________C Prepaid Insurance $ 600 __________C Prepaid Insurance and Prepaid expenses, and Customer are! Expenses in the status of a bank 's accrued interest Revenues, which types of adjusting involve! This site we will assume that you are happy with it ledger interest! Company will write a check to pay those commissions March is Rs any expired.. Can view our basics of bookkeeping tutorials here understanding of adjusting entry that reduces balance! A change in the adjustments column adjusting entries exercises the general ledger accounts interest Receivable and Fees Receivable joined. From the adjusting entry that should be entered by your company prepares statements! Money from a bank on December 31, if financial statements at the end each! Entry which debits interest Receivable and Fees Receivable. ] $ 9900/3= $ _________C... Expense, $ 300 of interest had been incurred ( PDF ) entries at March 31, if financial at! Borrowed $ 30,000 on November 1 included in the status of a bank December. Necessary to make the adjusting entry are accurate and complete Receivable account you will need credit... If the company information to answer questions 60 - 65: on December is. From the adjusting entry for March and show the ADJUSTMENT using written down method ( )! Be $ 10,000 best experience on our website give the adjusting entry become earned, the?. Account that should be entered by your company prepares monthly financial statements at the end of each month...