P3-63A. (Learning Objective 3: Making accounting adjustments) Journalize the adjusting entry needed on December 31, the end of the current accounting period, for each of the following independent cases affecting Speedy Corp. Include an explanation for each entry.

a. Details of Prepaid Insurance are shown in the account:

Speedy prepays insurance on March 31 each year. At December 31, $1,700 is still prepaid.

b. Speedy pays employees each Friday. The amount of the weekly payroll is $6,200 for a five-day work week. The current accounting period ends on Tuesday.

c. Speedy has a note receivable. During the current year, Speedy has earned accrued interest revenue of $500 that it will collect next year.

d. The beginning balance of supplies was $2,500. During the year, Speedy purchased supplies costing $6,300, and at December 31 supplies on hand total $2,100.

e. Speedy is providing services for Gold Investments, and the owner of Gold paid Speedy $15,000 as the annual service fee. Speedy recorded this amount as Unearned Service Revenue. Speedy estimates that it has earned 70% of the total fee during the current year.

f. Depreciation for the current year includes Office Furniture worth $3,200 and Equipment worth $5,000. Make a combined entry.

Transcribed Image Text:

Jan. 1 Bal. Prepaid Insurance 900 Mar. 31 3,600