Evans 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 $ 6,000, which will be paid on the next payroll date, January 6, 2015.

b. At year- end, the company had earned interest revenue of $ 3,000. The cash will be collected March 1, 2015.

Required:

1. What is the annual reporting period for this company?

2. Identify whether each transaction above is a deferral or an accrual. 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?