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Let's break down and solve the two problems shown in the image.

### Problem 6: Adjusting Entry for Salaries
- **Information given**:
  - Salaries paid are \$500 per day.
  - The weekly payroll ends on Friday, but the last day of the accounting period is Tuesday.
  - We need to calculate the necessary adjusting entry (5-day week).

- **Solution**:
  For a 5-day week, Friday is the last day. Since the accounting period ends on Tuesday, only 2 days of salaries (Monday and Tuesday) are unpaid but need to be accounted for in the adjusting entry.

  Salaries for 2 days = \$500/day × 2 days = **\$1,000**.

  The adjusting entry would be:
  - **Debit Salaries Expense**: \$1,000
  - **Credit Salaries Payable**: \$1,000

### Problem 7: Adjusting Entry for Prepaid Insurance
- **Information given**:
  - A 3-year fire insurance policy was purchased on **June 1** for **\$9,000**.
  - It was debited to the **Prepaid Insurance** account.
  - The camp's year-end is **November 30**.
  
  - **Part (a)**: Adjusting entry for the prepaid insurance.
  - **Part (b)**: Adjusting entry if the insurance was debited to **Insurance Expense** instead.

#### Part (a) Adjusting Entry for Prepaid Insurance:
- The insurance covers a period of 3 years (36 months).
- The total cost of the policy is \$9,000, so the monthly cost is:
  \[
  \frac{9,000}{36} = 250 \text{ per month}
  \]
  
- From **June 1 to November 30**, 6 months have passed. The insurance expense for this period is:
  \[
  250 \times 6 = 1,500
  \]
  
  Adjusting entry to recognize the expense:
  - **Debit Insurance Expense**: \$1,500
  - **Credit Prepaid Insurance**: \$1,500

#### Part (b) Adjusting Entry if Debited to Insurance Expense:
- If the entire \$9,000 was already debited to **Insurance Expense**, we need to adjust the entry to reflect only the used portion (6 months' worth of expense).
  
  To correct this:
  - **Debit Prepaid Insurance**: \$7,500 (for the remaining 30 months).
  - **Credit Insurance Expense**: \$7,500 (to adjust the prepaid portion).

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Do you have any questions, or would you like further details on any part of the solution? Here are some related questions you can explore:

1. How would the adjusting entry change if the accounting period ended on Wednesday instead of Tuesday in problem 6?
2. What would the adjusting entry be if the daily salary rate was \$600 instead of \$500?
3. How is the prepaid insurance expense allocated over time in financial reporting?
4. How would the accounting for prepaid expenses differ if the insurance policy were only for 1 year?
5. In what situations would an adjusting entry for salaries be unnecessary?

**Tip**: When dealing with adjusting entries, always check if the expense has been incurred but not yet paid (accrued), or if a prepaid asset needs to be recognized as an expense over time.

6. Salaries paid to employees are $500 per day. The weekly payroll ends on Friday, but Tuesday is the last day of the accounting period. Show the necessary adjusting entry (5-day week).
7. On June 1, Dry Lake camps purchased a 3-year fire insurance policy costing $9,000. This was debited to a Prepaid Insurance account. The camp’s year ends on November 30.
(a) Show the necessary adjusting entry.
(b) Show the entry if the above insurance policy was debited to an Insurance Expense account.

Learn how to create adjusting entries for unpaid salaries and prepaid insurance expenses. This problem covers accrual accounting principles, including the calculation of unpaid salaries and adjusting prepaid insurance over a 3-year policy.

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