Question

53,480 3,700 83,800 37,000 7,400 163,000 Lares payable Notes payable Interest payable Deferred sales revenue Common stock Retained earnings Dividends Sales revenue Interest revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Supplies expense Insurance expense Advertising expense Totals 87,000 20,600 12,700 2,800 4,700 410,400 410,400 Information necessary to prepare the year-end adjusting entries appears below. 1. Depreciation on the office equipment for the year is $11,700. 2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 3. On October 1, 2021, Pastina borrowed $53,400 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years. 4. On March 1, 2021, the company lent a supplier $23,400 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022. 5. On April 1, 2021, the company paid an insurance company $9,400 for a one-year fire insurance policy. The entire $9,400 was debited to prepaid insurance, 6. $980 of supplies remained on hand at December 31, 2021. 7. A customer paid Pastina $3,700 in December for 1.600 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue. 8. On December 1, 2021, $2,700 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $1,350 per month. The entire amount was debited to prepaid rent

Answer 1

1) Depreciation Expense A/ C Dr. 11700

To Accumulated Depreciation A/ C. 11700

(Being Depreciation charged on Office Equipment)

2) Salaries Expense A /C Dr. 1650

To Salaries payable A/ C. 1650

(Being salary due but not paid recorded)

3) Interest expense A/ C Dr. 1602

To Interest payable A /C. 1602

(Being interest payable recorded)

Interest period from 1st October to 31 Dec = 3 months.

53400*12%*3/12 = 1602

4) Interest Receivables A/ C Dr. 1560

To Interest revenue A/ C. 1560

(Being Interest Receivables recorded)

Interest period= 1st march to 31st Dec = 10 months

23400*8%*10/12 = 1560

5) Insurance Expense A /C Dr. 7050

To Prepaid Insurance A/C. 7050

(Being expired prepaid Insurance recorded)

Period = 1st mrch to 31 dec = 9 months

9400*9/12 = 7050

6) Supplies A /C Dr. 980

To Supplies Expense A/C. 980

( Being Supplies in hand recorded)

7) Deferred Sales revenue A/ C Dr. 3700

To Unearned sales revenue A /C. 3700

( Rectified the entry for credit of deferred revenue)

8) Rent Expense A /C Dr. 1350

To Prepaid Rent A /C. 1350

(Rent Expense for the month of December recorded.)