Common adjusting journal entries (Learning Objective 2) 15–20 min.

Journalize the adjusting entry needed at December 31, the end of the current accounting year, for each of the following independent cases affecting Pro Powersports, Inc.

No other adjusting entries have been made for the year.

a. Prior to making the adjusting entry on December 31, the balance in Prepaid Insurance is $10,200. Pro Powersports, Inc., pays liability insurance each year on September 1.

b. Pro Powersports, Inc., pays employees each Friday. The amount of the weekly payroll is $12,250 for a five-day workweek. December 31, the fiscal year-end, is a Wednesday.

c. Pro Powersports, Inc., received notes receivable from some customers for services provided. For the current year, accrued interest amounts to $475 and will be collected next year.

d. The beginning balance of Supplies was $825. During the year, $3,650 of supplies were purchased. At December 31, the supplies on hand total $1,100.

e. During the year, Pro Powersports, Inc., received $9,300 in advance for services to be provided at a later date. As of December 31, Pro Powersports, Inc., earned $7,700 of the total fees received in advance during the current year.

f. Depreciation for the current year includes Vehicles, $2,750, and Equipment, $1,400.AppendixLO1