Question

(Adjustment Entries) From the following information available on 31st March, 2018, pass the necessary Adjustment Entries in the Journal for the year ending on that date:
(i) Interest accrued ₹ 2,500.
(ii) Wages for March, 2018 outstanding ₹ 10,000.
(iii) Insurance prepaid ₹ 1,500.
(iv) Commission due to Manager 6% on net profit after charging such commission. The profit before charging such commission was ₹ 1,06,000.
(v) Interest due on loan but not paid. Loan of ₹ 1,50,000 was taken at 9% p.a. 9 months before end of the year.

Answer 1

Journal
S. No.	Particulars			L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2018
March 31	Accrued Interest A/c	Dr.			2,500
	To Interest A/c					2,500
	(Interest accrued)
March 31	Wages A/c	Dr.			10,000
	To Wages Outstanding A/c					10,000
	(Wages for the month of March outstanding)
March 31	Prepaid Insurance A/c	Dr.			1,500
	To Insurance A/c					1,500
	(Insurance paid in advance)
March 31	Manager’s Commission A/c		Dr.		6,000
	To Manager’s Commission Payable A/c					6,000
	(Manager Commission Charged on Net Profit)
	Note:
March 31	Interest on Loan A/c		Dr.		10,125
	To Interest Outstanding A/c					10,125
	(Interest on Loan Outstanding for 9 months)
	Note: