Question

The information necessary for preparing the 2021 year-end adjusting entries for Bearcat Personal Training Academy appears below. Bearcat’s fiscal year-end is December 31.
  

1. Depreciation on the equipment for the year is $5,800.
2. Salaries earned (but not paid) from December 16 through December 31, 2021, are $2,800.
3. On March 1, 2021, Bearcat lends an employee $14,000. The employee signs a note requiring principal and interest at 9% to be paid on February 28, 2022.
4. On April 1, 2021, Bearcat pays an insurance company $11,760 for a two-year fire insurance policy. The entire $11,760 is debited to Prepaid Insurance at the time of the purchase.
5. Bearcat uses $1,100 of supplies in 2021.
6. A customer pays Bearcat $2,340 on October 31, 2021, for three months of personal training to begin November 1, 2021. Bearcat credits Deferred Revenue at the time of cash receipt.
7. On December 1, 2021, Bearcat pays $4,200 rent to the owner of the building. The payment represents rent for December 2021 through February 2022, at $1,400 per month. Prepaid Rent is debited at the time of the payment

Record the necessary adjusting entries at December 31, 2021. No prior adjustments have been made during 2021. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
   

Answer 1

Adjusting entries

No	General Journal	Debit	credit
1	Depreciation expense	5800
	Accumulated depreciation-equipment		5800
2	Salaries expense	2800
	Salaries payable		2800
3	Interest receivable (14000*9%*10/12)	1050
	Interest revenue		1050
4	Insurance expense (11760/24*9)	4410
	Prepaid insurance		4410
5	Supplies expense	1100
	Supplies		1100
6	Deferred revenue (2340/3*2)	1560
	Training revenue		1560
7	Rent expense (4200/3)	1400
	Prepaid rent		1400