5.

Below are four transactions that were completed during 2020 by Flake Company. The annual accounting period ends on December 31. Each transaction will require an adjusting entry at December 31, 2020. You are to provide the 2020 adjusting entries required for Flake Company.

A. On March 1, 2020, Flake Company paid a two-year insurance premium for a policy on its equipment. This transaction was recorded as follows:

March 1, 2020:

Prepaid insurance

$3,000

Cash

3,000

Required: Prepare the December 31, 2020--Adjusting entry:

B. On December 31, 2020 a tenant renting some office space from Flake Company had not paid the rent of $900 for December.

Required: Prepare the December 31, 2020--Adjusting entry:

C. On September 1, 2020, Flake Company borrowed $3,000 cash and gave a nine month, 5 percent, note payable. The total interest is payable on the due date, August 31, 2021. The note was recorded as follows:

September 1, 2018:

Cash $3,000

Note payable $3,000

Required: Prepare the December 31, 2020--Adjusting entry:

D. Assume Flake Company publishes a magazine. On October 1, 2020, the company collected $440 for subscriptions two years in advance. The $440 collection was recorded as follows:

October 1, 2020:

Cash

$440

Unearned subscription revenues

440

Required: Prepare the December 31, 2018--Adjusting entry and provide an explanation for the journal entry