Section 5 Adjusting Journal Entries (10 Marks)

Prepare general journal entries on December 31, 2021 to record the following unrelated year-end adjustments. Show calculation where necessary.

a) On March 15, 2021, company took a $7,000 payment from a client for service to be completed during the year. The payment was recorded as unearned revenue. On December 31, 2021 all the service for the client is complete.

(b) On December 2, 2015, $6,200 of supplies were purchased and recorded as an asset. A count revealed $1,000 still on hand at December 31, 2021.

(c) Services performed during December but not yet billed to customers totalled $5,000.

(d) Depreciation of equipment is recorded using the straight-line method over 10 years. The equipment was purchased on December 1, 2021 for $300,000, and has no residual value at the end of its useful life.

(e) Prepaid insurance expired during the month of December was $2,500.