ASSET METHOD (PreRtid Expenses ~ Insurance) @) Origin, Eorys eo A FE Cash ae a4, 000 Foe auietees : Adjusting Enrty : ie : sees é Insurance Expence $ , 000 ae Prepaid Insurance ¢,000 et ice [ To record expived portion. (44,000 * 4]ia = %, 000 expired portion ) He be.) original Entyies on ocr: 01, ayy EXPENSE 2 MreRecT) Cash 100, 000 Notes Payable 0,000 : : Borrowed cash from te bank. ' Adjusting Entries on Dec. 3}, a0l4 : Interect Expense (100,000 * 7*}e * 4/ie) 1, 30 acered Interact Expense /Pyable ae 1,360 Accrual of Interest on loan. 7 STRAIGHT LINE MBTHOO if Hf c) asset cost 160 , 600 Less : Salvage valve 10,000 ; a Depreciawle Amount 150 , 000 ce i Divided wy Estinated life (Years) “3 yeas oe Depreciation Expense tvery year 90,000 Deprewiation Expense - Odlivery vor 50, 000 Accumulated Depreciation - Delivery yor 0, 000 Te record the located Depredation For +n@ year.LIABILITY MerHop (Pre - collection) 4) original cary in Cash $, COO unearned Service \avome 1,000 Adjusting Enty | Unearned senice | income 13, 600 Service income 19, G0 To ‘record earned portion. ( 18,000 x Iie _12S00 earned orton) e.) asser METHOD ( Prepaid expences = Supplies) Original Entry | Supplies ; ’, 400 Accounts Payable 400 Adjusting Eng : : oe Supplies Expense 7 He S, &SD = Supping Sites i Te record wed portion Cerdco - 760 = GOO used portion) f.) ACCRUFD Pence \ wreresr Original entries on May , Bory + cash Capital ag Invested cash for the corfificate depacit. Adjusting tntvies on Dec. 2). aoi4 Interest expense (90,000 44% * hig) @, 400 00 Accrued Interest Expense /Fayabre Accmal oF Interest on Investment. 2, 400-009:) PREPAID EXPENSE - RENT Asser METHOO ‘origing) eaty : Prepaid Rea 3000 - Cash ___7¢,000 Adjusting eahy | oe ae ae Rent Exponce ae, C00 : Pregaid Rent : a, 000 To vecord expired portion. (4,000 x 4/ia = a ,c00 expired portion) =