Prepare adjusting journal entries for the dog training business for the period ended December 31. December 31 One month of the 12 -month, $$ \$ 3,600 $$ insurance policy is expired by December 31. This leaves $$ \$ 3,300 $$ not yet expired, December 31 A physical count of supplies on December 31 shows that only $$ \$ 1,200 $$ of supplies remain of the $$ \$ 2,000 $$ supplies purchased. December 31 The $$ \$ 6,000 $$ of equipment purchased at the beginning of December has a useful 11 fe of 5 years and wlll be worth nothing at the end of 5 years ( 60 months). The business uses straight-1ine depreciation to allocate the $$ \$ 6,000 $$ net cost over 60 months. On December 31, 1 month of depreciation must be recorded. December 11 The business agreed on December 23 to provide a 4 -week training service to a customer for a $$ f 1 imes e d $$ fee of $$ \$ 1,600 $$ paid In advance. By December 31, the bustness has provided 1 of the 4 weeks of services and earned one-fourth of the fee. No revenue is yet recorded.

Question

Prepare adjusting journal entries for the dog training business for the period ended December 31. December 31 One month of the 12 -month, $$ \$ 3,600 $$ insurance policy is expired by December 31. This leaves $$ \$ 3,300 $$ not yet expired, December 31 A physical count of supplies on December 31 shows that only $$ \$ 1,200 $$ of supplies remain of the $$ \$ 2,000 $$ supplies purchased. December 31 The $$ \$ 6,000 $$ of equipment purchased at the beginning of December has a useful 11 fe of 5 years and wlll be worth nothing at the end of 5 years ( 60 months). The business uses straight-1ine depreciation to allocate the $$ \$ 6,000 $$ net cost over 60 months. On December 31, 1 month of depreciation must be recorded. December 11 The business agreed on December 23 to provide a 4 -week training service to a customer for a $$ f 1 	imes e d $$ fee of $$ \$ 1,600 $$ paid In advance. By December 31, the bustness has provided 1 of the 4 weeks of services and earned one-fourth of the fee. No revenue is yet recorded.

UpStudy AI · Accepted Answer

**1. Insurance Expense Adjustment**

- Total insurance policy: $$ \$3,600 $$ for 12 months  
- Monthly expense:  
$$
\frac{\$3,600}{12} = \$300
$$
- **Entry:**  
  - Debit: Insurance Expense $$ \$300 $$  
  - Credit: Prepaid Insurance $$ \$300 $$

---

**2. Supplies Expense Adjustment**

- Supplies purchased: $$ \$2,000 $$  
- Physical count remaining: $$ \$1,200 $$  
- Supplies used:  
$$
\$2,000 - \$1,200 = \$800
$$
- **Entry:**  
  - Debit: Supplies Expense $$ \$800 $$  
  - Credit: Supplies $$ \$800 $$

---

**3. Depreciation Expense Adjustment for Equipment**

- Equipment cost: $$ \$6,000 $$  
- Useful life: 60 months  
- Monthly depreciation:  
$$
\frac{\$6,000}{60} = \$100
$$
- **Entry:**  
  - Debit: Depreciation Expense $$ \$100 $$  
  - Credit: Accumulated Depreciation – Equipment $$ \$100 $$

---

**4. Revenue Recognition Adjustment (Unearned Revenue)**

- Total fee received in advance: $$ \$1,600 $$ for 4 weeks of training  
- Revenue earned for 1 week:  
$$
\frac{\$1,600}{4} = \$400
$$
- **Entry:**  
  - Debit: Unearned Revenue $$ \$400 $$  
  - Credit: Service Revenue $$ \$400 $$
**Adjusting Journal Entries for the Dog Training Business as of December 31:** 1. **Insurance Expense:** - Debit: Insurance Expense $$ \$300 $$ - Credit: Prepaid Insurance $$ \$300 $$ 2. **Supplies Expense:** - Debit: Supplies Expense $$ \$800 $$ - Credit: Supplies $$ \$800 $$ 3. **Depreciation Expense:** - Debit: Depreciation Expense $$ \$100 $$ - Credit: Accumulated Depreciation – Equipment $$ \$100 $$ 4. **Revenue Recognition:** - Debit: Unearned Revenue $$ \$400 $$ - Credit: Service Revenue $$ \$400 $$

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