Verne Cova Company has the following balances in selected accounts on December 31, 2019.
Accounts Receivable ...................................................$ -0-
Accumulated Depreciation-Equipment...............................-0-
Equipment................................................................7,000
Interest Payable............................................................-0-
Notes Payable..........................................................10,000
Prepaid Insurance.......................................................2,100
Salaries and Wages Payable.............................................-0-
Supplies..................................................................2,450
Unearned Service Revenue..........................................30,000
All the accounts have normal balances. The information below has been gathered at December 31, 2019.
1. Verne Cova Company borrowed $10,000 by signing a 12%, one-year note on September 1,
2019.
2. A count of supplies on December 31, 2019, indicates that supplies of $900 are on hand.
3. Depreciation on the equipment for 2019 is $1,000.
4. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2019.
5. On December 1, 2019, Verne Cova collected $30,000 for consulting services to be performed from December 1, 2019, through March 31, 2020.
6. Verne Cova performed consulting services for a client in December 2019. The client will be billed $4,200.
7. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2019.
Instructions
Prepare adjusting entries for the seven items described above.