Question

E2-9 Adjusting entries LO2-6 Prepare the necessary adjusting entries at December 31, 2021, for the Microchip Company for each of the following situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded 1. On October 1, 2021, Microchip lent $90.000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022 2. On November 1, 2021, the company paid its landlord $6,000 representing rent for the months of November through January. Prepaid rent was debited 3. On August 1, 2021, collected $12.000 in advance rent from another company that is renting a portion of Microchip's factory. The $12,000 represents one year's rent and the entire amount was credited to deferred rent revenue. 4. Depreciation on office equipment is $4,500 for the year 5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $8.000. The company records vacation pay as salaries expense 6. Microchip began the year with $2,000 in its asset account, supplies. During the year. $6,500 in supplies were purchased and debited to supplies. At year end, supplies costing $3.250 remain on hand.

Answer 1

Please hit LIKE button if this helped. Event Account Debit Credit 1 $ 1,800 Interest Receivable Interest Revenue (To record interest revenue accrued) $90,000*8%*3/12 $ 1,800 2 $ 4,000 Rent Expense Prepaid Rent (To record rent expense) $6,000*2/3 $ 4,000 3 $ 5,000 Deferreed Rent Revenue Rent Revenue (To record revenue earned) $12,000/12*5 $ 5,000 4 $ 4,500 Depreciation Expense Accumulated Depreciation (To record depreciation expense) $ 4,500 5 $ 8,000 Salaries Expense Salaries Payable (To record salaries expense) $ 8,000 6 $ 5,250 Supplies Expense Supplies (To record supplies expense) $2,000+$6,500-$3,250 $ 5,250