ACTIVITY 1

a. Initial Entry
Debit Credit
1 Printing Machine 78,000
Cash 78,000

2 Cash 90,000
Unearned Rental Income 90,000

3 Vehicle 340,000
Cash 340,000

ACTIVITY 2
JOURNAL ENTRIES
Debit
1 Cash 90,000
Unearned Rental Income

2 Accounts Receivable 12,000

Rental Income

3 Vehicle 500,000
Cash

4 Office Supplies 24,000

Cash
5 Office supplies 38,000
Accounts Payable
 b. Annual Depreciation c. Adjusting Entries
Debit
Machine cost 78,000 Depreciation expense-machine 600
Salvage value (6,000) Acccumulated Depreciation-machine
72,000
divide by useful life 10 yrs 7,200/12= 600 monthly depreciation
Annual Dep. 7,200

none Unearned Rental Income 30,000

90,000/3 30,000 monthly rental income Rental Income

Vehicle cost 340,000 Depreciation expense-vehicle 7,875

Salvage value (25,000) Acccumulated Depreciation-vehicle
315,000
divide by useful life 10 yrs 31,500/4 7,875 quarterly depreciation
Annual Dep. 31,500

ADJUSTING ENTRIES
Credit Debit Credit
Unearned Rental Income 15,000
90,000 Rental Income 15,000

90,000/6=15,000 Rental income for 1 month

Cash 6,000
12,000 Accounts Receivable 6,000

12,000/2=6,000 1 half collection of services

Depreciation expense-vehicle 3,625

500,000 Acccumulated Depreciation-vehicle 3,625

Vehicle cost 500,000

Salvage value (65,000)
435,000 43,500/12=3,625 monthly dep.
divide by useful life 10 yrs
Annual Dep. 43,500

Office supplies expense 11,500

24,000 Office supplies 11,500

Office Supplies used 11,500

38,000 No adjusting entry
Credit

600

30,000

7,875