Lindsey Home Staging is almost done its accounting for the year. Lindsey just found the last December 31 adjusting entries that need to be recorded:
a. Each Friday Lindsey pays employees for the current week's work. The amount of the weekly payroll is $6,500 for a five-day workweek. This year December 31 falls on a Tuesday. Lindsey will pay the employees on January 3.
b. On January 1 of the current year, Lindsey purchases a business insurance policy that covers two years for $5,500.
c. The beginning balance of her decorating supplies account was $4,200. During the year she purchased more supplies for $5,100, and at December 31 the supplies on hand total $2,900.
d. During December Lindsey prepared a home remodelling plan and the client prepaid $9,000. Lindsey recorded this amount as Unearned Revenue. The job will be completed by January 14. Lindsey estimates that the company earned 70 percent of the total revenue during the current year.
e. At December 31 Lindsey had earned $4,000 for staging services for Tomball Adamsey. Tomball has stated he will pay Lindsey on the closing date of his home, January 10.
f. Amortization for the current year includes Equipment, $3,600, and Vehicles, $1,400. Write this as one compound entry but use separate amortization accounts for each asset.
g. Lindsey incurred $300 of interest expense on a $500 interest payment due on January 18.
Required
1. Journalize the adjusting entries needed on December 31 for each of the items affecting Lindsey's Home Staging. Assume Lindsey only records adjusting entries at the end of the year.
2. Journalize the subsequent journal entries for adjusting entries a, d, and g.