Problem 4-SA A review of the ledger of Oriole Company at December 31, 2017, prod

Question

Problem 4-SA A review of the ledger of Oriole Company at December 31, 2017, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid nsurance $20 564. The company has separate insurance policies on ts buildings and ts motor vehicles. Poli B 564 on the building as purchased or uly ?, 20 for,230 · e policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2017, for $10,314. This policy has a term of 18 months 2. Unearned Rent Revenue $570,460. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. Date Nov. 1 Dec. 1 Term (in months) 9 Number of Leases Monthly Rent $5,340 $8,060 Notes Payable $44,000. This balance consists of a note for 6 months at an annual interest rate of 7%, dated October 1 4. Salaries and Wages Payable $0. There are 9 salaried employees. Salaries are paid every Friday for the current week. 6 employees receive a salary of $615 each per week, and 3 employees earn $740 each per week. Assume December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December. Prepare the adjusting entries at December 31, 2017. (Ifno entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Explanation / Answer

No. date account titles and explanation debit credit 1 dec 31 insurance expense 10976 Prepaid insurance expense [(12300 x 12/ 36) + (10314 x 12/18) = 8,420] 10976 2 dec 31 unearned rent revenue 104380 Rent Revenue (5340*2*6)+(8060*5*1) 104380 3 dec 31 interest expense 770 Interest payable (44000*7%*3/12) 770 4 dec 31 Salaries and wages expense 3546 Salaries and wages payable (6*615*3/5)+(3*740*3/5) 3546

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