Journalize the adjusting entry needed on December 31, end of the current accounting period, for each of the following independent cases affecting Rowling Corp. Include an explanation for each entry.
a. Details of Prepaid Insurance are shown in the account:
Rowling prepays insurance on March 31 each year. At December 31, $1,300 is still prepaid.
b. Rowling pays employees each Friday. The amount of the weekly payroll is $6,100 for a five-day work week. The current accounting period ends on Tuesday.
c. Rowling has a note receivable. During the current year, Rowling has earned accrued interest revenue of $400 that it will collect next year.
d. The beginning balance of supplies was $2,700. During the year, Rowling purchased supplies costing $6,400, and at December 31 supplies on hand total $2,200.
e. Rowling is providing services for Orca Investments, and the owner of Orca paid Rowling $12,000 as the annual service fee. Rowling recorded this amount as Unearned Service Revenue. Rowling estimates that it has earned 70% of the total fee during the current year.
f. Depreciation for the current year includes Office Furniture, $3,000, and Equipment, $5,400. Make a compoundentry.
This question was answered on: Jul 11, 2017
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