Lake of Fire Company purchased supplies costing $7,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of supplies revealed $1,900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

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The supplies account was debited for the full amount of $7,000 initially, but the physical count at the end of the period revealed that only $1,900 worth of supplies were used. Therefore, an adjustment needs to be made to reduce the balance of the asset account (Supplies) and recognize the expense (Supplies Expense). The appropriate journal entry would be to debit Supplies Expense for $5,100 (which is the difference between the initial balance of $7,000 and the physical count of $1,900) and credit Supplies for $5,100. Option C is the only one that reflects this entry.

Lake of Fire Company Purchased Supplies Costing $7,000 and Debited