95 CHAPTER 2 Review of the Accounting Process Required: Determine the following: 1. What is the interest rate on the company's note payable? 2. The 2021 rent payment was made at the beginning of which month? 3. How much did Eldorado lend its customer on October 312 es The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterly adjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30, 2021, for the following situations. 1. On December 1, 2020, the company paid its annual fire insurance premium of $6.000 for the year beginning December 1 and debited prepaid insurance. 2. On August 31, 2020, the company borrowed $80,000 from a local bank. The note requires principal and inter- est at 8% to be paid on August 31, 2021. 3. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $24,000 representing rent for the 2021 calendar year and credited deferred rent revenue. 4. Depreciation on the office building is $20,000 for the fiscal year. 5. Employee salaries for the month of June 2021 of $16,000 will be paid on July 20, 2021. The December 31, 2021. adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 21.000 Accounts receivable 300,000 Prepaid rent 10,000 Inventory 50,000 Office equipment 600,000 Accumulated depreciation 250,000 Accounts payable 60,000 Notes payable (due in six months) 60,000 Salaries payable Interest payable 2,000 Common stock 400,000 Retained earnings 100,000 Sales revenue 800,000 Cost of goods sold 480,000 Salaries expense 120,000 Rent expense 30,000 Depreciation expense 60,000 Interest expense 4,000 Advertising expense 5.000 Totals 1,680,000 1,680,000 8,000 95 CHAPTER 2 Review of the Accounting Process Required: Determine the following: 1. What is the interest rate on the company's note payable? 2. The 2021 rent payment was made at the beginning of which month? 3. How much did Eldorado lend its customer on October 312 es The Mazzanti Wholesale Food Company's fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterly adjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30, 2021, for the following situations. 1. On December 1, 2020, the company paid its annual fire insurance premium of $6.000 for the year beginning December 1 and debited prepaid insurance. 2. On August 31, 2020, the company borrowed $80,000 from a local bank. The note requires principal and inter- est at 8% to be paid on August 31, 2021. 3. Mazzanti owns a warehouse that it rents to another company. On January 1, 2021, Mazzanti collected $24,000 representing rent for the 2021 calendar year and credited deferred rent revenue. 4. Depreciation on the office building is $20,000 for the fiscal year. 5. Employee salaries for the month of June 2021 of $16,000 will be paid on July 20, 2021. The December 31, 2021. adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 21.000 Accounts receivable 300,000 Prepaid rent 10,000 Inventory 50,000 Office equipment 600,000 Accumulated depreciation 250,000 Accounts payable 60,000 Notes payable (due in six months) 60,000 Salaries payable Interest payable 2,000 Common stock 400,000 Retained earnings 100,000 Sales revenue 800,000 Cost of goods sold 480,000 Salaries expense 120,000 Rent expense 30,000 Depreciation expense 60,000 Interest expense 4,000 Advertising expense 5.000 Totals 1,680,000 1,680,000 8,000