Penny's Pool Service & Supply, Inc. (PPSS) is completing the accounting process for the year just ended, December 31 of the current year. The transactions during the year have been journalized and posted. The following data with respect to adjusting entries are available:

a. PPSS owed $6,750 wages to the office receptionist and three assistants for working the last 10 days in December. The employees will be paid in January of next year.

b. On October 1 of the current year, PPSS received $20,400 from customers who prepaid pool cleaning service for one year beginning on November 1 of the current year.

c. The company received a $160 utility bill for December utility usage. It will be paid in January of the next year.

d. PPSS borrowed $33,600 from a local bank on May 1 of the current year, signing a one-year, 10 percent note. The note and interest are due on May 1 of next year.

e. On December 31 of the current year, PPSS cleaned and winterized a customer's pool for $1,000, but the service was not yet recorded on December 31.

f. On August 1 of the current year, PPSS purchased a two-year insurance policy for $3,600, with coverage beginning on that date. The amount was recorded as Prepaid Insurance when paid.

g. On December 31 of the current year, PPSS had $6,100 of pool cleaning supplies on hand. During the current year, PPSS purchased supplies costing $18,000 from Pool Corporation, Inc., and had $2,600 of supplies on hand on December 31 of the prior year.

h. PPSS estimated that depreciation on its buildings and equipment was $10,000 for the year.

i. At December 31 of the current year, $160 of interest on investments was earned that will be received in the next year.

1. Prepare adjusting entries for Penny's Pool Service & Supply, Inc., on December 31 of the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer rating: 100% (QA)

Solution Adjusting entry No General Journal Debit Cred... View the full answer