Question

Exercise 3-10A Record year-end adjusting entries (LO3-3) Consider the following situations for Shocker: 1. On November 28, 2021, Shocker receives a $4,500 payment from a customer for services to be rendered evenly over the next three months. Deferred Revenue is credited 2. On December 1, 2021, the company pays a local radio station $2,700 for 30 radio ads that were to be aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited. 3. Employee salaries for the month of December totaling $8,000 will be paid on January 7, 2022. 4. On August 31, 2021, Shocker borrows $70,000 from a local bank. A note is signed with principal and 9% interest to be paid on August 31, 2022. Required Record the necessary adjusting entries for Shocker at December 31, 2021. No adjusting entries were made during the year. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Answer 1

Adjusting entries

Date	account and explanation	Debit	Credit
Dec 31	Deferred revenue (4500/3)	1500
	Service revenue		1500
	(To record service revenue)
Dec 31	Advertising expense (2700/3)	900
	Prepaid advertising		900
	(To record advertising expense)
Dec 31	Salaries expense	8000
	Salaries payable		8000
	(To record salaries expense)
Dec 31	Interest expense (70000*9%*4/12)	2100
	Interest payable		2100
	(To record interest)