3-1B - 5 types of Adjustments This problem explores 5 common types of adjusting journal entries. All problems relate to XYZ Company, which has a fiscal year-end of December 31. a.) Prepaid expenses - Supplies On December 15, XYZ Company was completely out of supplies, so the company purchased $1,500 of supplies on account. On December 31, a supply count revealed $200 of supplies were on hand. Required Record the entry for the purchase of supplies and for the year-end adjustment. b.) Depreciation XYZ Company purchases a new building for $720,000 on April 1, 2024. The building is fully financed by a mortgage. The building is expected to be useful for 20 years, after which time it will have no residual value. The company wishes to use straight-line depreciation. Required Record the journal entry for the purchase of the building and for the year-end adjustment. c.) Acerued expenses - Salaries XYZ Company pays salaries of $4,000 every Friday. The company has a 5-day workweek and is open from Monday to Friday. This year, the December 31 falls on a Thursday, Required Record the year-end adjustment and the entry for when salaries are paid on Friday, January 1. d.) Accrued revenues - interest On October 1, 2024, XYZ Company loaned an employee (Fred Smith) $1,000. Fred signed a note promising to pay back the $1,000 in full plus interest at annual rate of 12%. On May 1, Fred pays back the note and accrued interest. Required Record the journal entry for the initial loan, the year-end adjustment and the repayment. e.) Unearned revenues On December 1, 2024, three customers each prepaid $500 for a 5-month consulting package. XYZ Company fulfilled its obligations up to December 31. Required Record the journal entry December 1 and for the year-end adjustment