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.

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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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