Please show all work for the steps, not just the answer! Thank you! The Informat

Question

Please show all work for the steps, not just the answer! Thank you!

The Information necessary for preparing the 2018 year-end adjusting entries for Vito's Pizza Parlor appears below. Vito's fiscal year- end is December 31. a. On July 1, 2018, purchased $15,000 of IBM Corporation bonds at face value. The bonds pay Interest twice a year on January 1 and July 1. The annual interest rate is 11%. b. Vito's depreciable equipment has a cost of $42.000, a six-year life, and no salvage value. The equipment was purchased In 2016. The straight-lne depreclation method is used. c. On November 1, 2018, the bar area was leased to Jack Donaldson for one year. Vito's recelved $9,000 representing the first stx months rent and credited deferred rent revenue d. On April 1, 2018, the company pald $3,600 for a two-year fire and liablity Insurance policy and deblted Insurance expense. e. On October 1, 2018, the company borrowed $30,000 from a local bank and signed a note. Principal and interest at 11% will be paid on September 30, 2019 f. At year-end, there is a $2.300 debit balance in the supplies (asset) account. Only $800 of supplies remain on hand.

Explanation / Answer

Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Interest Receivable       825.00 $15,000 X 11% X 6/12    Interest Revenue       825.00 $15,000 X 11% X 6/12 (To record the accrued interest on IBM Corp. Bonds) b. Depreciation Expense    7,000.00 $42,000 / 6 Years    Accumulated Deprecaition - Equipment    7,000.00 $42,000 / 6 Years (To record the depreciation expense) c. Deferred Rent Revenue    3,000.00 ($9,000 / 6 Months) X 2 Months    Rent Revenue    3,000.00 ($9,000 / 6 Months) X 2 Months (To record the rent revenue for Nov. & Dec.) d. Prepaid Insurance Expense    2,250.00 ($3600 / 24 Months) X 15 Months    Insurance Expense    2,250.00 (To record the prepaid insurance) e. Interest Expense       825.00 $30,000 X 11% X 3/12 Interest Payable       825.00 $30,000 X 11% X 3/12 (To record the interest accrue on Note) f. Supplies Expense    1,500.00 $2,300 - $800    Supplies    1,500.00 (To record the supplies expense)

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