Refer to the information in P3-39. Prepare adjustments required at December 31 using journal entries.

Q3-39

The following information relates to December 31 accounting adjustments for Koonce Kwik Print Company. The firm's fiscal year ends on December 31 .

1. Weekly salaries for a five-day week total \(\$ 3,600\), payable on Fridays. December 31 of the current year is a Tuesday.

2. Koonce Kwik Print has \(\$ 20,000\) of notes payable outstanding at December 31. Interest of \(\$ 200\) has accrued on these notes by December 31, but will not be paid until the notes mature next year.

3. During December, Koonce Kwik Print provided \(\$ 900\) of printing services to clients who will be billed on January 2. The firm uses the account Fees Receivable to reflect amounts earned but not yet billed.

4. Starting December 1, all maintenance work on Koonce Kwik Print's equipment is handled by Richardson Repair Company under an agreement whereby Koonce Kwik Print pays a fixed monthly charge of \(\$ 400\). Koonce Kwik Print paid six months' service charge of \$2,400 cash in advance on December 1, and increased its Prepaid Maintenance account by \(\$ 2,400\).

5. The firm paid \(\$ 900\) cash on December 15 for a series of radio commercials to run during December and January. One-third of the commercials have aired by December 31 . The \(\$ 900\) payment was recorded in its Prepaid Advertising account.

6. Starting December 16, Koonce Kwik Print rented 800 square feet of storage space from a neighboring business. The monthly rent of \(\$ 0.80\) per square foot is due in advance on the first of each month. Nothing was paid in December, however, because the neighboring business agreed to add the rent for one-half of December to the January 1 payment.

7. Koonce Kwik Print invested \(\$ 5,000\) cash in securities on December 1 and earned interest of \(\$ 38\) on these securities by December 31. No interest will be received until January.

8. Annual depreciation on the firm's equipment is \(\$ 2,175\). No depreciation has been recorded during the year.

Required Prepare Koonce Kwik Print Company's accounting adjustments required at December 31 using the financial statement effects template.