The Warsaw Corporation began business operations on December 1, Year One. The company had the following transactions during the time when it was starting:

1. An employee was hired on December 1 for $4,000 per month with the first payment to be made on January 1.

2. The company made an $18,000 payment on December 1 to rent a building for the following six months.

3. Supplies were bought on account for $10,000 on December 1. Supplies are counted at the end of the year and $3,600 is still on hand.

4. The company receives $9,000 for a service that it had expected to provide immediately. However, a problem arises because of a series of delays and the parties agree that the service will be performed on January 9.

5. A job was completed near the end of the year, and the customer will pay Warsaw all $8,000 early in the following year. Because of the late date, no entry was made at that time.

Required:

Prepare the proper journal entries for each of these transactions as well as the year-end adjustment (if needed) for each.

Answer rating: 100% (QA)

1 No entry will be required at the time of hiring but year ... View the full answer