Adjusting Entries

1 OG Supplies 30,000
Cash 30,000
AE Supplies 15,000
Supplies Expense 15,000

2 OG Prepaid Utilities 20,000

Accounts Payable 20,000
AE Utilities Expense 20,000
Utilities Payable 20,000

3 OG Equipment 125,500
Cash 125,500
AE Depreciation Expense 14,125
Accumulated Depreciation - Expense 14,125

4 OG Accounts Receivable 15,750

Service Revenue 15,750
AE Accounts Receivable 15,750
Service Revenue 15,750

5 OG Accounts Receivable 300,000

Service Revenue 300,000
AE Accounts Receivable 6,000
Service Revenue 6,000

6 OG Prepaid Insuranace 150,000

Cash 150,000
AE Insurance Expense 41,670
Prepaid Insurance 41,670

7 OG Cash 36,000
Unearned Service Revenue 36,000
AE Unearned Service Revenue 12,000
Service Revenue 12,000

8 OG Salaries Expense 16,800

Salaries Payable 16,800
AE Salaries Expense 16,800
Salaries Payable 16,800

9 OG Interest Expense 150,000

Interest Payable 150,000
AE Interest Expense 1,500
 Interest Payable 1,500

10 OG Equipmet 215,000
Cash 215,000
AE Depreciation Expense 7,644
Accumulated Depreciation - Equipment 7,644
8 Salary per day 280
Days unpaid 4
Number of employees 15
Total Salaries Pyable 16,800

9 Formula: I = (Prt)/100
(P) Principal Value 150,000
(R) Interest per annum 6
 (T) Number of months to be paid 9 (3/4 year)
(I) Interest for 9 months 6,750
Interest per month 750
Oct 12 to Dec 31 interest 1500

10 Cost of Equipment 215,000

Residual Value (20%) 43,000
Useful Life 15
Depreciation Expense per year 11,466.67
Depreciation Expense per month 955.56
May 1 to Dec 31 7,644.44