Question

The information necessary for preparing the 2015 year-end adjusting entries for Winter Storage appears below. Winter’s fiscal year-end is December 31.
a. Depreciation on the equipment for the year is $7,000.
b. Salaries earned (but not paid) from December 16 through December 31, 2015, are $3,400.
c. On March 1, 2015, Winter lends an employee $12,000 and a note is signed requiring principal and interest at 6% to be paid on February 28, 2016.
d. On April 1, 2015, Winter pays an insurance company $15,000 for a one-year fire insurance policy. The entire $15,000 is debited to prepaid insurance at the time of the purchase.
e. $1,500 of supplies are used in 2015.
f. A customer pays Winter $4,200 on October 31, 2015, for six months of storage to begin November 1, 2015. Winter credits unearned revenue at the time of cash receipt.
g. On December 1, 2015, $4,000 advertising is paid to a local newspaper. The payment represents advertising for December 2015 through March 2016, at $1,000 per month. Prepaid advertising is debited at the time of the payment.

Required:
Record the necessary adjusting entries at December 31, 2015. No prior adjustments have been made during 2015.



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  • CreatedJuly 15, 2014
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