Question

Exercise on (Video) Blossom Company has the following balances in selected accounts on December 31, 2020 50 Accounts Receivable Accumulated Depreciation Equipment Equipment Interest Payable Notes Payable Prepaid Insurance Salaries and Wages Payable Supplies Uneared Service Revenue 6.000 0 10,000 1,800 0 2.000 28.000 All the accounts have normal balances. The information below has been gathered at December 31, 2020, 1 3 4 Blossom Company borrowed 58.400 by signing a 99, one year note on September 1, 2020 A count of supplies on December 31, 2020, indicates that supplies of $800 are on hand. Depreciation on the equipment for 2020 is $1,000 Blossom Company paid $1,800 for 12 months of insurance coverage on June 1, 2020. On December 1, 2020, Blossom collected $28,000 for consulting services to be performed from December 1, 2020, through March 31, 2021. The company had performed 1/4 of the services by December 31 Blossom performed consulting services for a client in December 2020. The client will be billed $3,500. Blossom Company pays its employees total salaries of $5,100 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2020 . 7

Answer 1

Adjusting entries

Date	General Journal	Debit	Credit
Dec 31	Interest expense (8400*9%*4/12)	252
	Interest payable		252
Dec 31	Supplies expense (2000-800)	1200
	Supplies		1200
Dec 31	Depreciation expense	1000
	Accumulated depreciation-equipment		1000
Dec 31	Insurance expense (1800/12*7)	1050
	Prepaid insurance		1050
Dec 31	Unearned service revenue (28000/4)	7000
	Service revenue		7000
Dec 31	Account receivable	3500
	Service revenue		3500
Dec 31	Salaries and wages expense (5100/5*3)	3060
	Salaries and wages payable		3060