The information necessary for preparing the December 31, 2024, year-end adjusting entries for Vito's Pizza Parlor...

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The information necessary for preparing the December 31, 2024, year-end adjusting entries for Vito's Pizza Parlor appears below. a. On July 1, 2024, purchased $19,000 of IBM Corporation bonds at face value. The bonds pay interest twice a year on January 1 and July 1. The annual interest rate is 10%. b. Vito's depreciable equipment has a cost of $6,000, a five-year life, and no salvage value. The equipment was purchased in 2022. The straight-line depreciation method is used. c. On November 1, 2024, the bar area was leased to Jack Donaldson for one year. Vito's received $8,400 representing the first six months' rent and credited deferred rent revenue at the time cash was received. d. On April 1, 2024, the company paid $1,440 for a two-year fire insurance policy and debited prepaid insurance at the time of the payment. e. On October 1, 2024, the company borrowed $12,000 from a local bank and signed a note. Principal and interest at 10% will be paid on September 30, 2025. f. At year-end, there is a $1,250 debit balance in the supplies (asset) account. Only $620 of supplies remain on hand. Required: 1. Prepare the necessary adjusting journal entries on December 31, 2024. 2. Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore income tax expense.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 The information necessary for preparing the December 31, 2024, year-end adjusting entries for Vito's Pizza Parlor appears below. a. On July 1, 2024, purchased $19,000 of IBM Corporation bonds at face value. The bonds pay interest twice a year on January 1 and July 1. The annual interest rate is 10%. b. Vito's depreciable equipment has a cost of $6,000, a five-year life, and no salvage value. The equipment was purchased in 2022. The straight-line depreciation method is used. c. On November 1, 2024, the bar area was leased to Jack Donaldson for one year. Vito's received $8,400 representing the first six months' rent and credited deferred rent revenue at the time cash was received. d. On April 1, 2024, the company paid $1,440 for a two-year fire insurance policy and debited prepaid insurance at the time of the payment. e. On October 1, 2024, the company borrowed $12,000 from a local bank and signed a note. Principal and interest at 10% will be paid on September 30, 2025. f. At year-end, there is a $1,250 debit balance in the supplies (asset) account. Only $620 of supplies remain on hand. Required: 1. Prepare the necessary adjusting journal entries on December 31, 2024. 2. Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore income tax expense.) Complete this question by entering your answers in the tabs below. Required 1 Required 2

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Required 1 Adjusting Journal Entries on December 31 2024 a Accrue interest revenue for six months ... View the full answer