Adjusting Entry for Office Supplies Purchase
Explanation:
Debit: Supplies On Hand $40,000
Credit: Office Supplies Expense $34,000
Credit: Supplies On Hand $6,000
This entry debits the asset account Supplies On Hand for the total cost of the supplies initially purchased, and credits the expense account Office Supplies Expense for the amount of supplies used during the year. The remaining supplies, valued at $6,000, are credited to the asset account Supplies On Hand.