Individual Homework #2 Page 9 of 17 Problem #2: Year-End Adjusting Entries (54 points) Gandee Candy, a wholesale distributor of penny candy and other novelties, is a calendar-year corporation. The Company also provides consulting services under various types of contracts to purveyors of its products. The Company records adjusting entries annually immediately prior to preparing its GAAP financial statements. Required: Presented below are seven fact sets that require adjusting entries at December 31, 2020. Some fact sets also require you to prepare regular journal entries. Analyze the facts provided and prepare the required journal entries and the appropriate adjusting entries in proper general journal form. You must clearly present supporting calculations when requested. An unsupported correct answer will receive a deduction of two points. Throughout this problem you will record journal entries involving cash. I did not provide T-accounts for cash. Therefore, you will not post the cash portion of the entries. You should only use these accounts from the chart of accounts of Gandee Candy: Accounts Receivable Interest Expense Office Supplies Expense Accounts Payable Interest Receivable Prepaid Advertising Accumulated Depreciation Interest Revenue Prepaid Insurance Advertising Expense Interest Payable Prepaid Rent Cash Notes Payable Prepaid Salaries Consulting Revenue Notes Receivable Rent Revenue Deferred Consulting Revenue Office Equipment Salaries Expense Depreciation Expense Office Equipment Expense Salaries Payable Insurance Expense Office Supplies Be aware that you will not use every account listed above in your entries. O Gridlines cal Side (to side One Page Multiple Pages Zoom 100 Page Width Navigation Pane New Arrange Split Window All View Side by Side DI Synchronous Sool Switch En est Window Position Windows Window Macros P Movement Show Zoom Macros SH Individual Homework #2 Page 11 of 17 Fact Set #2 (6 points) At December 31, 2020, Gandee Candy determined that it performed consulting services for Sissonville Confections during December for a fee of $11,600 that had not yet been billed or recorded. Prepare the required adjusting journal entry to record the consulting services performed. (2 points) ADJUSTING ENTRY: DATE ACCOUNT NAMES DEBIT CREDIT On January 12, 2021, Sandes Candy received a check from Sissonville Confections for $13,500 in payment of services provided in December 2020 and early January 2021. (4 points) DATE ACCOUNT NAMES DEBIT CREDIT I Fact Set #3 (16 points) On August 1, 2020, Gandee Candy borrowed $120,000 from its bank and issued a 6-month promissory note bearing 6.4% Interest. Under the terms of the note, interest is due quarterly on November 1 and February 1, 2021 and principal is due to the bank at maturity on February 1, 2021. Prepare the required journal entry to record the loan received from the bank on August 1, 2020. Post the entry to the applicable T-account(s). 1 points) DATE ACCOUNT NAMES DEBIT CREDIT Droo O E // * PrtScn FS Home End Poup Poor FO
