Journalizing adjusting and reversing entries.
The data below concerns adjustments to be made at Victoria Company.
INSTRUCTIONS
1. Record the adjusting entries in the general journal as of December 31, 2016. Use 25 as the first journal page number. Include descriptions.
2. Record reversing entries in the general journal as of January 1, 2017. Include descriptions.
ADJUSTMENTS
a. On October 1, 2016, the firm signed a lease for a warehouse and paid rent of $20,700 in advance for a six-month period.
b. On December 31, 2016, an inventory of supplies showed that items costing $1,940 were on hand. The balance of the Supplies account was $11,620.
c. A depreciation schedule for the firm’s equipment shows that a total of $9,200 should be charged off as depreciation for 2016
d. On December 31, 2016, the firm owed salaries of $5,400 that will not be paid until January 2017.
e. On December 31, 2016, the firm owed the employer’s social security (6.2 percent) and Medicare (1.45 percent) taxes on all accrued salaries.
f. On September 1, 2016, the firm received a five-month, 6 percent note for $5,500 from a customer with an overdue balance.
Analyze: After the adjusting entries have been posted, what is the balance of the Prepaid Rent account on January 1, 2017?
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