Diane Company completed its first year of operations on December
Diane Company completed its first year of operations on December 31, 2014. All of the 2014 entries have been recorded except for the following:
a. At year-end, employees earned wages of $4,000, which will be paid on the next payroll date, January 6, 2015.
b. At year-end, the company had earned interest revenue of $1,500. The cash will be collected March 1, 2015.

Required:
1. What is the annual reporting period for this company?
2. Identify whether each transaction results in adjusting a deferred or an accrued account. Using the process illustrated in the chapter, prepare the required adjusting entry for transactions (a) and (b).
Include appropriate dates and write a brief explanation of each entry.
3. Why are these adjustments made?

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