Problem 8: Please prepare adjusting entries for Fargo on Dec. 31. Credit 9,000 U

Question

Problem 8: Please prepare adjusting entries for Fargo on Dec. 31. Credit 9,000 Unadjusted trial balance of Fargo: Debit Note Payable Equipment Accounts Receivable Sales Revenue COGS InventonY Unearned Rent Revenue Supply Expenses Cash Wage Expenses 7,000 1,800 51,000 15,000 4,000 3,000 4,500 700 30,000 1) The note payable represents a two-year 7% bank loan borrowed on Oct. 1. 2) The 3,000 unearned rent revenue results from a payment that Fargo received on December 1 for rent of the next three months 3) Sales revenue includes $1,500 received from a customer on November 1 for a custom pool table, which is scheduled for delivery next March. 4) Fargo routinely charges purchase of supplies to Supply Expenses. By Dec 31, Fargo has $500 supplies on hands. 5) Employee wages are paid twice a month on the 10th and 25th. Unpaid salary for December (26th 31st) is $1,600

Explanation / Answer

1 Interest expense 157.5 =9000*7%/12*3         Interest payable 157.5 2 Unearned rent revenue 1000           Rent revenue 1000 3 Sales revenue 1500          Unearned sales revenue 1500 4 Supplies 500        Supplies expense 500 5 Wages expense 1600        Wages payable 1600

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