Prepare adjusting journal entries for the following events related to the transactions in P15-16, and post the journal entries to general ledger T-accounts. (Use the T-accounts set up for P15-16 where appropriate, and set up new T-accounts as needed.)
1. Accrue interest for 3 months on the bank loan in P15-16, transaction 2. Dr. DeLapa had to repay the $80,000 loan in five annual installments of $16,000, starting May 31, 2014, with interest at the rate of 6 percent per annum on the unpaid balance.
2. Adjust for the expiration of the prepaid rent in transaction 3.
3. Adjust for 3 months’ amortization on the $20,000 leasehold improvement in transaction 4. The leasehold improvement should be amortized over the 5-year life of the lease.
4. Record depreciation for 3 months on the equipment purchased for $56,000 in transaction 5.
The equipment has an estimated useful life of 7 years.
5. Dr. DeLapa took an inventory of the dental supplies purchased in transaction 6. The inventory totaled $4,100, the remainder having been consumed in providing dental care.
6. Accrue $700 for 2 days’ salaries for Dr. DeLapa’s employees.