Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2015, appears below. December 31 is the company€™s fiscal year-end.

Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation of equipment for the year is $6,000.
b. Accrued salaries at year-end should be $2,100.
c. Crimson Tide borrows $20,000 on September 1, 2015. The principal is due to be repaid in four years. Interest is payable each August 31 at an annual rate of 12%.
d. Unused supplies at year-end total $700. Crimson Tide debits Supplies at the time supplies are purchased.
e. Crimson Tide opens a second studio by purchasing one year of rent in advance on April 1, 2015, for $7,200 ($600 per month) debiting Prepaid Rent.
f. Unpaid utilities for December total $200.

Required:
Record the necessary adjusting entries on December 31, 2015.

Transcribed Image Text:

Debits Credits $10,300 S 12,000 Utilities Payable Retained Eamings 24,500 2,400 $145,900 145,900