Question

Buzzard Bicycle specializes in custom painting and design of bicycles December 31 is the company's fiscal year-end. Information necessary to prepare the year-end adjusting entries appears below 1 A three-year fire insurance policy was purchased on July 1 2021 for $18,000. The company debited Prepaid Insurance for the entire amount 2 Employee salaries of $25,000 for the month of December will be paid in early January 3. On November 1, 2021, the company received $6,000 in cash from a customer requesting a custom design for six identical bikes ($1,000 each) Deferred Revenue was credited for the entire amount. By the end of the year, four of the bikes have been completed 4. Supplies at the beginning of the year totaled $2,000. During 2021, additional supplies of $18,000 were purchased, and the entire amount was debited to Supplies Supplies remaining at the end of the year total $4,000. 5. Buzzard paid a local radio station $12.000 for four months of advertising on December 1 2021 The advertising will appear evenly over the four month period. The company debited Prepaid Advertising for the entire amount 6. Buzzard borrowed $36,000 on March 12021 The principal is due to be collected in five years. Interest is receivable each March 1 at an annual rate of 10% Required: Record the necessary adjusting entries on December 31, 2021 (Do not round intermediate calculations. If no entry is required for particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet A three-year fire insurance policy was purchased on July 1, 2021 for $18,000. The company debited Prepaid Insurance for the entire amount Record the adjusting entry for insurance at its year-end of December 31 Net Enter debts before credits December 31 < Prev 12 of 23 Next >

Answer 1

solution Dec 31 2021 3000 3000 Insurance Expense prepald Insurance [ To record expired Insurance expense 2. Dec 31, 2021 25000 25000 salaries Expense salaries payable [ To record accorwed salaries expense Dec 31, 2021 4000 4000 Dec 31, 2021 16000 H600D Deferred Revenue sales revenue L'To record acowed guvenve] Supplies expense supplies [To record supplees expense Advertisement Experse prepaid Advertising [ To record advertisement experse for expired Dec 31, 2021 3000 3000 perlod] Dec 31, 2021 3000 3000 Interest expense 2 36odoxio Mix10127 Interest payabie [ To record acowed . Interest on borrowing]