Arrow Company Prepares Monthly Financial Statements

Essay

Arrow Company prepares monthly financial statements. On July 1, the Office Supplies account had a balance of $3,000. During July, additional office supplies were purchased for $3,800 and that amount was debited to Office Supplies Expense. On July 31, a physical count of office supplies revealed that there was $2,400 on hand. Prepare the adjusting journal entry that Arrow Company should make on July 31.
2. Fletching Rental Agency prepares monthly financial statements. On September 1, a check for $7,200 was received from a tenant for six months' rent. The full amount was credited to Rent Revenue. Prepare the adjusting entry the company should make on September 30.