Lori Matlock operates a graphic arts business. A trial balance on June 30, 2014, before recording any adjusting entries, appears as follows:
Other Data;
a. The monthly rent is $600.
b. Supplies on hand on June 30, 2014, amount to $1,290.
c. The office equipment was purchased on June 1, 2013. On that date, it had an estimated useful life of ten years and a salvage value of $6,120.
d. Interest owed on the note payable but not yet paid amounts to $50.
e. Salaries of $620 are owed but unpaid to employees at the end of the month.
Required
1. Prepare in general journal form the necessary adjusting entries at June 30, 2014. Label the entries (a) through (e) to correspond to the other data.
2. Note that the unadjusted trial balance reports a credit balance in Accumulated Depreciation—Equipment of $4,000. Explain why the account contains a balance of $4,000 on June 30, 2014.