Question

Jaguar Auto Company provides general car maintenance to customers. The company’s fiscal year-end is December 31. The December 31, 2015, trial balance (before any adjusting entries) appears below.


Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation on the machines for the year is $10,000.
b. Employee salaries are paid every two weeks. The last pay period ended on December 23. Salaries earned from December 24 through December 31, 2015, are $4,000.
c. On September 1, 2015, Jaguar borrows $35,000 from a local bank and signs a note. The note requires interest to be paid annually on August 31 at 9%. The principal is due in five years.
d. On March 1, 2015, the company purchases insurance for $24,000 for a one-year policy to cover possible injury to mechanics. The entire $24,000 was debited to Prepaid Insurance at the time of the purchase.
e. $5,000 of supplies remains on hand at December 31, 2015.
f. On December 30, Jaguar receives a utility bill of $2,200 for the month. The bill will not be paid until early January 2016, and no entry was recorded when the bill was received.

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


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  • CreatedJuly 15, 2014
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