Overhead Journal Entries: Adjusting Cost of Goods Sold. For the year ending December 31, 20x6, Risor Corporation incurred variable factory overhead totaling $93,000 and fixed factory overhead totaling $218,000. The company applied variable overhead on the basis of 30 percent of direct labor cost and fixed overhead on the basis of 75 percent of direct labor cost. Direct labor cost for the year totaled $300,000.

a. Prepare journal entries as of December 31, 20x6, to record the applied and incurred factory overhead for the year. (Note: Credit "various accounts" in recording the incurred overhead.)

b. Prepare journal entries to adjust cost of goods sold as of December 31 for the amount of underapplied or overapplied overhead.