Question

The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assume all quarterly adjusting entries were properly recorded. On December 1, 2017, the company paid its annual fire insurance premium of $5,600 for the year beginning December 1 and debited prepaid insurance. On August 31, 2017, the company borrowed $92,500 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2018. Mazzanti owns a warehouse that it rents to another company. On January 1, 2018, Mazzanti collected $23,200 representing rent for the 2018 calendar year and credited deferred rent revenue. Depreciation on the office building is $17,400 for the fiscal year. Employee salaries and wages for the month of June 2018 of $18,000 will be paid on July 20, 2018. Prepare the necessary year-end adjusting entries at the end of June 30, 2018, for the above situations. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Pass the adjusting journal entry as follows: Account Title and Explanation | Debit Credit Date 2018 Jun. 30 $1,400 $1,400 Insurance Expense Prepaid Insuarnce (To record isurance expense $5,000 (3/12)months.) Debit Credit $1,850 Date Account Title and Explanation 2018 Jun. 30 Interest Expense Interest Payable (To record interest expense $92,500x8% (3/12) months.) $1,850 Debit Credit $5,800 Date Account Title and Explanation 2018 Jun. 30 Deferred Rent Revenue Rent Revenue (To record rent revenie $23,200x(3/12)months.) $5,800

Account Title and Explanation Debit Credit 2018 Jun. 30 $4,350 $4,350 Depreciation Expense-Office Building Accumulated Depreciation- Office Building (To record depreciation expense $17,400X (3/12)months.) Account Title and Explanation Debit Credit Date 2018 Jun. 30 $18,000 Salaries and Wages Expense Salaries and Wages payable (To record salaries and wages expense.) $18.000