Events concerning the Ellen Company for 2015 are described below:

a. On September 1, 2015, a two-year comprehensive insurance policy was purchased for $2,400. The payment was debited to prepaid insurance.

b. On December 1, 2015, a customer paid 51,250 in advance for services to be performed in January of 2016. The payment was credited to Unearned Revenue.

c. On January 1, 2015, the office supplies account had a $500 balance. Supplies costing $3.100 were purchased during the year. At December 31, an inventory count showed $100 of supplies on hand.

d. On December 31, 2015, $4,800 of unpaid employee salaries had accumulated. No entry for these salaries has been recorded.

e. Straight-line depreciation is recorded only at year-end and is being used for a building that was purchased at the beginning of 2014 for $48,000. with an expected life of 30 years and an estimated residual value of $3,000.

f. The income tax rate is 35% on current income. Pretax income before the above adjusting entries was $95,600.

Required:

Prepare the appropriate December 31, 2015, adjusting entry for each item, or indicate that an adjusting entry is not necessary. Assume that Ellen's transactions were initially recorded In permanent (balance sheet) accounts unless otherwise Indicated.

Answer rating: 100% (QA)

a Insurance expense 400 2400244 Prepaid insurance 400 b No ent... View the full answer