The following 2007 information is available concerning the Drake Company, which adjusts and closes its accounts every December 31:

1. Salaries accrued but unpaid total $2,840 on December 31, 2007.

2. The $247 December utility bill arrived on December 31, 2007 and has not been paid or recorded.

3. Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be depreciated; equipment with a cost of $44,000, eight-year life, and $2,000 residual value is also to be depreciated. The straight-line method is to be used.

4. A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year.

5. The company holds a $6,000, 12% (annual rate), six-month note receivable dated September 30, 2007 from a customer. The interest is to be collected on the maturity date.

6. Bad debts expense is estimated to be 1% of annual sales. 2007 sales total $65,000.

7. An analysis of the company insurance policies indicates that the Prepaid Insurance account is to be reduced for the $528 of expired insurance.

8. A review of travel expense reports indicates that $310 advanced to sales personnel (and recorded as Travel Expenses) has not yet been used by these personnel.

9. The income tax rate is 30% on current income and will be paid in the first quarter of 2008. The pretax income of the company before adjustments is $18,270.

Required

Journalize the necessary adjusting entries for the company at the end of 2007. Show supporting calculations in your journal entry explanations.