Question: Wingnut Co. Selected account balances BEFORE adjustment for Wingnut Co. at December 31, 2022 (end of the current year) are shown below: Debits Credits Note
| Wingnut Co. | |||||||||
| Selected account balances BEFORE adjustment for Wingnut Co. at | |||||||||
| December 31, 2022 (end of the current year) are shown below: | |||||||||
| Debits | Credits | ||||||||
| Note receivable | 100,000 | ||||||||
| Interest receivable | |||||||||
| Supplies | 12,700 | ||||||||
| Prepaid Insurance | 15,000 | ||||||||
| Equipment | 125,600 | ||||||||
| Accumulated Depreciation - Equipment | 37,500 | ||||||||
| Notes payable | 250,000 | ||||||||
| Salaries payable | |||||||||
| Interest Payable | |||||||||
| Unearned fees | 5,200 | ||||||||
| Unearned subscriptions revenue | 44,000 | ||||||||
| Fees earned | 1,250,000 | ||||||||
| Subscriptions revenue | 4,000 | ||||||||
| Interest Income | |||||||||
| Salary expense | 750,000 | ||||||||
| Interest Expense | |||||||||
| Insurance expense | 21,000 | ||||||||
| Depreciation expense | 13,750 | ||||||||
| Supplies expense | 39,250 | ||||||||
| Information regarding December 2022 adjusting entries: | |||||||||
| a. | Wingnut borrowed $250,000 @ 12% issuing a 120-day note payable | ||||||||
| dated December 16th, 2022 | |||||||||
| b. | On May 1st Wingnut paid $36,000 for insurance coverage for the twelve | ||||||||
| month period commencing May 1st. | |||||||||
| HINT: Adjusting entries relative to this item have already been recorded | |||||||||
| for the months of May through November. | |||||||||
| c. | On November 1st Wingnut accepted $48,000 for annual subscriptions | ||||||||
| related to a monthly newsletter. | |||||||||
| HINT: An adjusting entries relative to this item have already been recorded | |||||||||
| for the month of November. | |||||||||
| d. | Wingnut accepted a 18%, $100,000, 45-day note receivable from LAMCO | ||||||||
| dated December 2nd, 2022 | |||||||||
| e. | On Friday January 2, 2023 Wingnut employees were paid $30,000 | ||||||||
| for the TWO five-day work week then ended | |||||||||
| f. | Wingnut had received a $5,200 cash advance on December 1st | ||||||||
| for services to be rendered over the four month period beginning | |||||||||
| December 1, 2022 and ending March 28, 2023 | |||||||||
| g. | A pitiful LAM took an inventory of supplies at Dec. 31st | ||||||||
| claiming that $8,300 were on-hand. | |||||||||
| h. | Depreciation on equipment for December 2022 was calculated to be $1,520 | ||||||||
| Required: | |||||||||
| Prepare the appropriate adjusting entries | |||||||||
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