Question

LDW Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2021, appears below. December 31 is the company's reporting year-end. The company uses the perpetual inventory system. Credits Debits 24,200 33,400 Oc 74,000 61,800 Account Title Cash Accounts receivable Supplies Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Common stock Retained earnings Dividends Sales revenue Cost of goods sold Interest expense Salaries expense Rent expense Supplies expense Utilities expense Totals 10,900 27,000 3,900 39,000 89,000 4,350 7,800 189,000 104,000 0 33, 250 14,900 2,900 6,900 363, 150 363,150 Information necessary to prepare the year-end adjusting entries appears below. 1. The office equipment was purchased in 2019 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value. 2. Accrued salaries at year-end should be $5,850. 3. The company borrowed $39,000 on September 1, 2021. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%. 4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $590. 5. Prepaid rent at year-end should be $1,900. Required: Prepare the necessary December 31, 2021, adjusting entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

Prepare the entries for 1 - 5

Answer 1

Based on the information available in the question, we can answer as follows:-

Entry #1:-

Depreciation on office equipment = $61,800/8 years

Depreciation on office equipment = $7,725

Date	Particulars	Amount	Amount
December 31	Depreciation Expense A/c($61,800/8 years)	7,725
	To Accumulated Depreciation A/c		7,725
	(To record depreciation expenses on Office equipment)

Entry #2:-

Date	Particulars	Amount	Amount
December 31	Salary Expense A/c Dr.	5,850
	To Accrued Salaries Payable A/c		5,850
	(To record accrued but not yet paid salaries)

Entry #3:-

December 31, 2021	Interest expense($39,000 * 10% * 4/12)	1,300
	To Interest Payable		1,300
	(To record the interest payable)

Entry #4:-

December 31, 2021	Retained Earnings	2,310.00
	To Supplies expense		2,310.00
	(To record the supplies used)

Entry #5:-

December 31, 2021	Retained Earnings($14,900 - $1,900)	13,000.00
	To Rent expense		13,000.00
	(To record the Rent expense)

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