Question

Below are transactions for Wolverine Company during 2021.

Answer 1

Answer:

Check the explanation for the answer

Explanation:

Wolverine Company

Adjusted journal entries for the year ended 31st December 2021.

DATE         PARTICULARS                                    DEBIT ($)   CREDIT ($)

1/12/2021 Rent receivable                                        4000

                       Deferred revenue                                                          4000

                      Being the correction of rent deferred

                      revenue

1/7/2021        Insurance expenses                                13200

                     Prepaid insurance                                                            13200

                     Being the correction of error of prepaid

                     insurance      

1/1/2020      Salaries expenses                                    3000

                    Salaries payable                                                                3000

                    Being the correction of salaries

                   expenses

1/11/2021      Loan interest expenses                            1500

                    Loan payable                                                                      1500

                    Being the  correction of loan

                    expenses

1/8/2020      Office supplies expenses                         4400

                    Prepaid office supplies                                                        4400

                   Being the correction of error of office

                   supplies

                                  Total                               26100            26100

The word ’journal’ means a dairy or day books which is use for recording of any financial transaction. It helps in reducing the possibility of an error when transactions are first recorded. The journal is not part of the double entry system; its purpose is giving details of entries, which will appear in the Ledger.  

Deferred revenue which can also be refer to as unearned revenue are income receive on goods or services which have not been rendered to the customer, because the service has not been rendered to the payer, it is a debt or liability to the company so this should be treated as a credit entry under Journal entry.

Accrued expenses: these are expenses owed or due for payment by the company which has not been paid, for example, owing of employment wages or salaries at the end of accounting period, the expenses should be debited under journal entry and wages payable should be credited.