For each of the following independent situations, prepare the adjusting entry that must be made on December
Question:
For each of the following independent situations, prepare the adjusting entry that must be made on December 31, 20X1. Omit descriptions.
a. On December 31, 20X1, the Notes Payable account at Tsang Manufacturing Company had a balance of $18,000. This balance represented a three-month, 8.5 percent note issued on November 1.
b. On January 2, 20X1, Hitech Computer Consultants purchased flash drives, paper, and other supplies for $6,230 in cash. On December 31, 20X1, an inventory of supplies showed that items costing $1,620 were on hand. The Supplies account has a balance of $6,230.
c. On October 1, 20X1, South Dakota Manufacturing paid a premium of $14,640 in cash for a one-year insurance policy. On December 31, 20X1, the Prepaid Insurance account has a balance of $14,640.
d. On June 1, 20X1, Headcase Beauty Salon signed a one-year advertising contract with a local radio station and issued a check for $13,200 to pay the total amount owed. On December 31, 20X1, the Prepaid Advertising account has a balance of $13,200.
Step by Step Answer:
College Accounting A Contemporary Approach
ISBN: 9781260780352
5th Edition
Authors: David Haddock, John Price, Michael Farina