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Demello & Associates records adjusting entries on an annual basis. The company has the following information available on accruals that must be recorded for the
Demello & Associates records adjusting entries on an annual basis. The company has the following information available on accruals that must be recorded for the year ended December 31, 2021:
1. | Demello has a $15,600, 6% note receivable with a customer. The customer pays the interest on a monthly basis on the first of the month. Assume the customer pays the correct amount each month. | |
2. | Demello pays its employees a total of $7,000 every second Wednesday. Employees work a five-day week, Monday to Friday, and are paid for all statutory holidays. December 31, 2021, is a Friday. Employees were paid on Wednesday, December 29, 2021, up to the Friday of the prior week. | |
3. | Demello has a contract with a customer where it provides services prior to billing the customer. On December 31, 2021, this customer owed Demello $3,290. Demello billed the customer on January 7, 2022, and collected the full amount on January 18, 2022. | |
4. | Demello received the $450 December utility bill on January 10, 2022. The bill was paid on its due date, January 22, 2022. | |
5. | Demello has a $25,200, 8% note payable. Interest is paid every six months, on October 31 and April 30. Assume that Demello made the correct interest payment on October 31, 2020, and April 30, 2021. |
Prepare the adjusting journal entries required on December 31, 2021
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