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DEBIT $ CREDIT $ Prepaid advertising 30,000 Materials on hand 6,000 Prepaid rent 8,000 Term deposit Accumulated depreciation - Computers 10,000 Fees income 218,000 Prepaid
DEBIT $ | CREDIT $ | |
Prepaid advertising | 30,000 |
|
Materials on hand | 6,000 |
|
Prepaid rent | 8,000 |
|
Term deposit |
|
|
Accumulated depreciation - Computers |
| 10,000 |
Fees income |
| 218,000 |
Prepaid income |
| 30,000 |
Term deposit | 50,000 |
|
Equipment | 20,000 |
|
Accumulated depreciation- Equipment |
| 5,000 |
Electricity expense | 12,000 |
|
Computers | 40,000 |
|
The following information needs to be taken into account at the end of the financial year:
- $600 is owing for electricity supplied in December 2021.
- $30,000 advertising was prepaid on 1 October 2021 for the period ended 31 March 2022.
- A fee for work performed on account (credit) in December for $800 has not been recorded.
- The equipment has a useful life of 5 years and no scrap value. It is depreciated using the straight line method.
- The term deposit of $50,000 was invested on 1 November 2021 for 6 months at 3% interest per annum.
- 15 % of the prepaid income balance has been earned by 31 December 2021.
- The computers have an estimated life of 4 years and are depreciated using the diminishing value (reducing balance) method.
- At the end of the year, materials on hand are $2,000.
REQUIRED:
- Prepare the adjusting general journal entries as at 31 December 2021.
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