Question

Required: Record the necessary adjusting entries at December 31, 2021, for Hurricane Company for each of the situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (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.) Journal entry worksheet 1. On October 1, 2021, Hurricane lends $7,700 to another company. The other company signs a note indicating principal and 12% interest will be paid to Hurricane on September 30, 2022. Record the adjusting entry for interest at its year-end of December 31. 2. On November 1, 2021, Hurricane pays its landlord $2,550 representing rent for the months of November through January. The payment is debited to Prepaid Rent for the entire amount. Record the adjusting entry for rent at its year-end of December 31. 3. On August 1, 2021, Hurricane collects $11,640 in advance from another company that is renting a portion of Hurricane's factory. The $11,640 represents one year's rent and the entire amount is credited to Deferred Revenue. Record the adjusting entry for deferred revenue at its year-end of December 31. 4. Depreciation on machinery is $4,200 for the year. Record the adjusting entry for depreciation at its year-end of December 31. 5. Salaries for the year earned by employees but not paid to them or recorded are $3,700. Record the adjusting entry for salaries at its year-end of December 31. 6. Hurricane begins the year with $850 in supplies. During the year, the company purchases $4,200 in supplies and debits that amount to Supplies. At year-end, supplies costing $2,200 remain on hand. Record the adjusting entry for supplies at its year-end of December 31.

Answer 1

Adjusting entry

Date	Account and explanation	Debit	Credit
Dec 31	Interest receivable (7700*12%*3/12)	231
	Interest revenue		231
Dec 31	Rent expense (2550/3*2)	1700
	Prepaid rent		1700
Dec 31	Deferred revenue (11640/12*5)	4850
	Rent revenue		4850
Dec 31	Depreciation expense	4200
	Accumulated depreciation-machine		4200
Dec 31	Salaries expense	3700
	Salaries payable		3700
Dec 31	Supplies expense (850+4200-2200)	2850
	Supplies		2850