Valley Company faced the following situations. Journalize the adjusting entry needed at December 31, 2014, for each situation. Consider each fact separately.
a. The business has interest expense of $2,100 that it must pay early in January 2015.
b. Interest revenue of $3,900 has been earned but not yet received.
c. On July 1, 2014, when the business collected $14,000 rent in advance, it debited Cash and credited Unearned Rent Revenue. The tenant was paying for two years’ rent.
d. Salary expense is $2,300 per day—Monday through Friday—and the business pays employees each Friday. This year, December 31 falls on a Wednesday.
e. The unadjusted balance of the Supplies account is $3,110. Te total cost of supplies on hand is $1,600.
f. Equipment was purchased at the beginning of this year at a cost of $120,000. The equipment’s useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment’s book value.