The trial balance for Cozy Fireplaces Inc. for December 31, 2020, follows:

Additional information for adjusting entries:

1. The deposits from customers were for future deliveries. As at December 31, three-quarters of these goods had been delivered.

2. There is $2,000 in wages owed at year end.

3. Rent is paid in advance on the last day of each month. There was a balance of $3,000 in the Prepaid Rent account on January 1, 2020. At the end of January, $3,000 was paid for the February rent and was debited to the Prepaid Rent account. All the rent payments during the year were treated the same way. The rent for July to December increased to $4,000 per month. Determine the amount of rent expense for 2020, as well as the correct amount that has been prepaid for 2017, and make an adjustment that will bring both these accounts to the correct balances.

4. A count of the supplies at year end revealed that $500 of supplies were still on hand.

5. The building is being depreciated over 20 years with a residual value of $20,000.

6. The bank loan was taken out on April 1, 2020. The first interest payment is due on April 1, 2021. The interest rate is 9%.

7. Income tax for the year should be calculated using a tax rate of 30%. After you finish the other adjusting entries, you will have to determine the income before income tax and then calculate the tax as 30% of this amount.

Required

Prepare the adjusting entries for the year 2020.

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Debit Credit balances balances $ 89,000 Cash Accounts receivable 38,000 Inventory 95,000 Supplies 5,000 Prepaid rent 46,000 Land 80,000 Building 150,000 $ 19,500 Accumulated depreciation, building Accounts payable 21,400 Wages payable Interest payable Income tax payable Unearned revenue 12,400 Bank loan payable 40,000 Common shares 150,000 Retained earnings 16,700 Sales revenue 840,000 482,000 Cost of goods sold Wages expense 95,000 Rent ex pense Supplies expense Depreciation expense Interest expense Miscellaneous expense 14,000 Income tax expense Dividends declared 6,000 Totals $1,100,000 $1,100,000