Question

LO3, 4 MBC P3-5A. Adjusting Entries The following information relates to December 31 adjustments for Best Print, a printing company. The firm's fiscal year ends on December 31. 1. Weekly salaries for a five-day week total $3,000, payable on Fridays. December 31 of the current year is a Tuesday. 2. Best Print has $25,000 of notes payable outstanding at December 31. Interest of $275 has accrued on these notes by December 31, but will not be paid until the notes mature next year. 3. During December, Best Print provided $1,000 of printing services to clients who will be billed on January 2. The firm uses the account Fees Receivable to reflect amounts due but not yet billed.

Answer 1

Best Print Adjusting Enteries Trans. Particulars Debit in $ Credit in $ 1 Salaries expense 1200 Salaries Payable 1200 (Salary Expense accrued) 3000 x 2/5 2 275 Interest Expense Interest Payable (Interest accrued) 275 3 1000 Fees Receivable Fees Earned (Fees earned) 1000 4 125 Maintenance Expense Prepaid Maintenance (Maintenance expense) 125 5 300 Advertising Expense Prepaid Advertising (Advertising Expense) 300 6 180 Rent Expense Rent Payable (Rent accrued) 400 x 0.90 x 0.50 180 7 62 Interest Receivable Interest Revenue (Interest revenue accrued) 62 8 2600 Depreciation Expense Accum. Depre. -Equip (To record depreciation) 2600