Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2021, appears below. December 31 is the company?s reporting year-end. The company uses the perpetual inventory system.

Information necessary to prepare the year-end adjusting entries appears below.1. The office equipment was purchased in 2019 and is being depreciated using the straight-line method over a ten-year useful life with no salvage value.2. Accrued salaries at year-end should be $4,500.

3. The company borrowed $30,000 on September 1, 2021. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.5. Prepaid rent at year-end should be $1,000.

Required:Prepare the necessary December 31, 2021, adjusting entries.

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Credits Account Title Debits Cash 23,300 Accounts receivable 32,500 Supplies Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable -0- 65,000 75,000 10,000 26,100 3,000 30,000 Common stock 80,000 Retained earnings 22,050 Dividends 6,000 180,000 Sales revenue Cost of goods sold 95,000 Interest expense -0- Salaries expense 32,350 Rent expense 14,000 Supplies expense Utilities expense 2,000 6,000 Totals 351,150 351,150