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Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2016, appears below. December 31 is the companys fiscal

Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2016, appears below. December 31 is the companys fiscal year-end. The company uses the perpetual inventory system.

Account Title Debits Credits
Cash 24,200
Accounts receivable 33,400
Supplies 0
Prepaid rent 0
Inventory 74,000
Office equipment 76,800
Accumulated depreciationoffice equipment 10,900
Accounts payable 27,000
Salaries and wages payable 3,900
Note payable 39,000
Common stock 89,000
Retained earnings 11,550
Sales revenue 189,000
Cost of goods sold 104,000
Interest expense 0
Salaries and wages expense 33,250
Rent expense 14,900
Supplies expense 2,900
Utility expense 6,900
Totals 370,350 370,350

Information necessary to prepare the year-end adjusting entries appears below.
1.

The office equipment was purchased in 2014 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.

2. Accrued salaries and wages at year-end should be $5,850.
3.

The company borrowed $39,000 on September 1, 2016. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.

4.

The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $590.

5.

Prepaid rent at year-end should be $1,900.

Required:

Prepare the necessary December 31, 2016, adjusting entries.

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