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Delightfully Spoiled Pets Inc. (DSP) began operations in 2014. The company has a year-end of December 31. It is now January 2, 2021, and the
- Delightfully Spoiled Pets Inc. (DSP) began operations in 2014. The company has a year-end of December 31. It is now January 2, 2021, and the company is about to prepare its adjusting journal entries. The following information is provided:
- On May 1, 2020, DSP purchased a two-year business insurance policy for $3,600. The amount was recorded to Prepaid Insurance. No adjustments have been made to the account since that date.
- On August 31, 2020, DSP borrowed $180,000 from the local bank. The loan carries an interest rate of 5%. The loan, plus interest, is repayable in nine months, on May 31, 2021.
- Depreciation on the companys equipment is calculated as $8,500 for the year.
- DSP estimates that its December utilities bill is $750. The bill has not yet been received from the utilities company.
- On September 1, 2020, DSP purchased $12,500 of office supplies, and recorded the purchase to Office Supplies (an asset account). On December 31, 2020, there were $5,200 of supplies remaining.
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