Question

Give journal entries for the following adjustments in final accounts:
(i) Salaries ₹ 5,000 are outstanding.
(ii) Insurance amounting to ₹ 2,000 is paid in advance.
(iii) ₹ 4,000 for rent have been received in advance.
(iv) Commission earned but not received ₹ 1,000.
(v) Interest on capital ₹ 1,500.
(vi) Interest on Drawings ₹ 300.
(vii) Write off ₹ 2,000 as further bad-debts.
(viii) Closing Stock ₹ 3,000.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
1.	Salary A/c	Dr.		5,000
	To Outstanding Salary A/c				5,000
	(Salary outstanding, now adjusted)
2.	Prepaid Insurance A/c	Dr.		2,000
	To Insurance A/c				2,000
	(Insurance pre-paid, now adjusted)
3.	Rent A/c	Dr.		4,000
	To Rent Received in Advance A/c				4,000
	(Advance rent received, now adjusted)
4.	Accrued Commission A/c	Dr.		1,000
	To Commission A/c				1,000
	(Commission receivable, now adjusted)
5.	Interest on Capital A/c	Dr.		500
	To Capital A/c				500
	(Interest on capital, now allowed)
6.	Drawings A/c	Dr.		300
	To Interest on Drawings A/c				300
	(Interest on drawings charged)
7.	Bad Debts A/c	Dr.		2,000
	To Debtors A/c				2,000
	(Bad debts written off)
8.	Closing Stock A/c	Dr.		3,000
	To Trading A/c				3,000
	(Closing Stock transferred to Trading Account)