Please answer as many of these as you can. It would be VERY helpful in total the
ID: 2370875 • Letter: P
Question
Please answer as many of these as you can. It would be VERY helpful in total there are 7 i need this as possible as it is due in 5 hours haha thanks in advanced
PROBLEM
Adjusting Entries Sarah Company's trial balance on December 31, 2013 (the end of its annual accounting period), included the following account balances before adjustments:
Debit Credit
Notes Receivable $10,000
Insurance 3,000
Delivery Equipment 14,000
Building 60,000
Unearned Rent $4,320
Notes Payable 7,200
Reviewing the company's recorded transactions and accounting records for 2013, you find the following data pertaining to the December 31, 2013 adjustments:
Required:
Prepare the adjusting entries that are necessary to bring Sarah's accounts up to date on December 31, 2013. Each journal entry explanation should summarize your calculations. No calculations = no points for me...
1. On July 2, 2013, the company had accepted a $10,000, 9-month, 10% (annual rate) note receivable from a customer. The interest is to be collected when the note is collected
2. On August 2, 2013, the company had paid $3,000 for a 2-year insurance policy.
3. The building was acquired in 1998 and is being depreciated using the straight-line method over a 25-year lief. It has an estimated residual value of $8,000.
4. The delivery equipment was purchased on April 2, 2013. It is to be depreciated using the straight-line method over a 10-year life, with an estimated residual value of $2,000.
5. On September 1, 2013, the company had received 2 years' rent in advance ($4320) for a portion of a building it is renting to Victoria Company.
6. On December 1, 2013, the company had issued a $7,200, 30month, 12% (annual rate) note payable to a supplier. The interest is to be paid when the note is paid.
7. On January 2, 2013, the company purchased $1,000 of office supplies. A physical count on December 31, 2013, revealed that there are $400 of office supplies still on hand. No supplies were on hand at the beginning of the year.
Explanation / Answer
1. On July 2, 2013, the company had accepted a $10,000, 9-month, 10% (annual rate) note receivable from a customer. The interest is to be collected when the note is collected
31Dec13 Int Accrued Dr 667
Int Rxable Cr 667
(Int on 10000*10%*6/9 = $667)
2. On August 2, 2013, the company had paid $3,000 for a 2-year insurance policy.
31 Dec'13 Insurance Expense Dr 625
Prepaid Insurance Cr 625
(Insurance for 5 month = 3000*5/24 =625)
3. The building was acquired in 1998 and is being depreciated using the straight-line method over a 25-year lief. It has an estimated residual value of $8,000.
31 Dec'13 Dep Exp Dr 2080
Accum Dep Cr 2080
(Dep SLN = (60000-8000)/25 = $2,080.00)
4. The delivery equipment was purchased on April 2, 2013. It is to be depreciated using the straight-line method over a 10-year life, with an estimated residual value of $2,000.
31 Dec'13 Dep Exp Dr 900
Accum Dep Cr 900
(Dep SLN = (14000-2000)/10 = $1200. SO for 9m, Dep = 1200*9/12 = 900)
5. On September 1, 2013, the company had received 2 years' rent in advance ($4320) for a portion of a building it is renting to Victoria Company.
31Dec13 Rent Rxd Dr 720
Unearned Rent Cr 720
(Rent for Sep-Dec 4month = 4320*4/24 = $720.00)
6. On December 1, 2013, the company had issued a $7,200, 30month, 12% (annual rate) note payable to a supplier. The interest is to be paid when the note is paid.
31 Dec13 Int exp Dr 288
Int Payable Cr 288
(Int on 1 Month for 3 month note. 7200*12%*1/3 = $288)
(I think it is 3 month & not 30 Month. Else use 7200*1/30)
7. On January 2, 2013, the company purchased $1,000 of office supplies. A physical count on December 31, 2013, revealed that there are $400 of office supplies still on hand. No supplies were on hand at the beginning of the year.
31Dec13 Supplies Expense Dr 400
Supplies Cr 400
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