Answer:
The proper adjusting journal entry at January 31 would: a) include a credit to Supplies for $400
Explanation:
On January 7, Bravo purchased supplies on account for $1,000, and recorded this purchase to the Supplies account by the entry:
Debit Supplies account $1,000
Credit Accounts Payable $1,000
At the end of January, Bravo had $600 of these supplies still on hand. Supplies were used in January = $1,000 - $600 = $400
The adjusting journal entry at January 31:
Debit Supplies Expense $400
Credit Supplies account $400
