}) 1) Midterm Review Asset Furniture C Adjusting Entries 3 Note: round all amounts to nearest dollar. Directions: DarkStar Action Games records adjusting entries on an annual basis. The following information is available for the year ended December 31, 2011: a) Purchased a one-year insurance policy on April 1, 2011, for $4,740 cash. b) On September 25, 2011, received $3,600 cash from a corporation that sponsors games for the most improved students attending a nearby school. The $3,600 was for 10 games, worth $360 each, that are played on the first Friday of each month. The first month was October, so three games played. (Use the account Unearned Game Revenue.) On November 1, 2011, paid $5,850 for three months' rent in advance. Lighting Equipment Computer Equipment d) Signed a contract for cleaning services starting December 1, 2011, for $1,050 per month. Paid for the first two months on December 1. e) Sold $1,350 of gift certificates in 2011. On December 31, 2011, determined that $475 of these gift certificates had not yet been redeemed. (Use the account Unearned Gift Certificate Sales.) f) The December utility bill for $425 was unrecorded on December 31. DarkStar paid the bill on January 17, 2012. B) DarkStar is open seven days a week and employees are paid a total of $3,500 every Monday for a seven-day (Monday to Sunday) workweek that just ended. December 31, 2011, is a Saturday, so employees will be paid next on January 2, 2012. h) DarkStar has a 5% note payable with its bank for $45,000. Interest is payable on a monthly basis on the first of the following month. DarkStar receives a commission from Pizza Express down the street for all pizzas sold to customers using DarkStar's facility. The amount owing for December is $490, which Pizza Shop will pay January 5, 2012. DarkStar sold some equipment on November 1, 2011, in exchange for a $6,000, 6% note receivable. The principal and interest are due February 1, 2012. k) Prepare the year end depreciation adjusting entries for DarkStar. DarkStar owns the following property plant and equipment (PPE): Date Purchased October 1, 2011 July 1, 2009 December 31, 2008 Cost $8,800 28,000 12,600 Estimated Useful Life 4 years 7 years 3 years Page 8 Date General Journal Account Titles and Explanation C PR Debit 2020-2021-FA1-Midterm Review Page Credit 13129 131293"800" Y-403