Questions: Purchases of supplies for cash during December were 3,900. Supplies on hand at the end of December equal 3,200. Record the adjusting entry on December 31.

To address the requirement for the first item regarding supplies, we need to record both the transaction during December and the adjusting entry at the end of December.

1. Purchase of Supplies:

   • When supplies are purchased for cash, the Supplies account is debited, and Cash is credited.

   Journal Entry:

   • Debit: Supplies $3,900
   • Credit: Cash $3,900

2. Adjusting Entry for Supplies:

   • At the end of December, we need to adjust the Supplies account to reflect the supplies on hand. The initial balance of supplies was $1,700, and $3,900 worth of supplies were purchased, making the total $5,600. Since $3,200 worth of supplies are on hand, the supplies used during December are $5,600 - $3,200 = $2,400.

   Adjusting Journal Entry:

   • Debit: Supplies Expense $2,400
   • Credit: Supplies $2,400

This adjusting entry reflects the cost of supplies used during the month of December.