Adjusting Entries The following information relates to the December 31 adjustments for Water Barrier, a firm providing waterproofing services for commercial and residential customers. The firms fiscal year ends December 31; no adjusting entries have been made during the year.

The firm paid a $3,000 premium for a three-year insurance policy, coverage to begin October 1. The premium payment was debited to Prepaid Insurance.

Weekly wages for a five-day work week total $1,250 payable on Fridays. December 31 is a Thursday.

Water Barrier received $4,800 in November for services to be performed during December through February of the following year. When received, this amount was credited to Unearned Service Fees. By December 31, one-third of this amount was earned.

Water Barrier receives a 5% commission from the manufacturer on sales of a waterproofing agent to Water Barriers customers. By December 31, Water Barrier had sales of $10,000 (during November and December) for which no commissions had been received or recorded.

During December, fuel oil costs of $650 were incurred to heat the firms buildings. Because the monthly bill from the oil company has not yet arrived, no entry has been made for this amount (fuel oil costs are charged to Utilities Expense).

The Supplies account has a balance of $17,500 on December 31. A count of supplies on December 31 indicates that $3,500 worth of supplies are still on hand.

On December 1, Water Barrier borrowed $10,000 from the bank, giving a note payable. Interest is not payable until the note is due near the end of the following January. However, the interest for December is $95.

Water Barrier rents parking spaces in its lot to firms in the office building next door. On December 1, Water Barrier received $8,000 as advance payments to cover parking privileges in the lot for December through March of the following year. When received, the $8,000 was credited to Unearned Parking Fees.

Required Prepare the required December 31 adjusting entries in the general journal form.

General Journal Ref Date Description Dec 31 (1) To record insurance expense for October thru December 31 To record accrued wages at December 31. 31 To record fees received in advance that are earned by December 31 Debit Credit