Kastina Company sells various types of pasta to grocery chains as private label brands The company's fiscal year end is December 31 The unadjusted trial balance as of December 31, 2021, appears below Account Title Debits Credits Cash 33,000 Accounts receivable 43,000 Supplies 1,500 Inventory 63,000 Note receivable 26,000 Interest receivable 0 Prepaid rent 3,000 Prepaid insurance 6,360 Office equipment 80,000 Accumulated depreciationoffice equipment 30,000 Accounts payable 34,000 Salaries and wages payable 0 Note payable 56,000 Interest payable 0 Deferred revenue 0 Common stock 63,000 Retained earnings 28,460 Sales revenue 152,000 Interest revenue 0 Cost of goods sold 73,000 Salaries and wages expense 19,200 Rent expense 11,000 Depreciation expense 0 Interest expense 0 Supplies expense 1,100 Insurance expense 0 Advertising expense 3,300 Totals 363,460 363,460 Information necessary to prepare the year end adjusting entries appears below Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month Salaries and wages earned from December 16 through December 31, 2021, were $1,800 On October 1, 2021, Kastina borrowed $56,000 from a local bank and signed a note The note requires interest to be paid annually on September 30 at 12 The principal is due in 10 years Depreciation on the office equipment for the year is $10,000 On December 1, 2021, $3,000 rent was paid to the owner of the building and recorded a journal entry to prepaid rent The payment represented rent for December 2021 and January 2022, at $1,500 per month On March 1, 2021, Kastina lent a customer $26,000 and a note was signed requiring principal and interest at 9 to be paid on February 28, 2022 A customer paid Kastina $2,300 in December for 1,590 pounds of spaghetti to be delivered in January 2022 During December, Kastina credited sales revenue and needs to adjust for unearned revenue $800 of supplies remained on hand at December 31, 2021 On April 1, 2021, the company paid an insurance company $6,360 for a two year fire insurance policy The entire $6,360 was debited to prepaid insurance Prepare the necessary December 31, 2021, adjusting journal entries (If no entry is required for a transaction event, select No journal entry required in the first account field Do not round intermediate calculations )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 22, 2024

Kastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance

Kastina Company sells various types of pasta to grocery chains as private label brands. The company's fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.

Account Title	Debits	Credits
Cash	33,000
Accounts receivable	43,000
Supplies	1,500
Inventory	63,000
Note receivable	26,000
Interest receivable	0
Prepaid rent	3,000
Prepaid insurance	6,360
Office equipment	80,000
Accumulated depreciationoffice equipment		30,000
Accounts payable		34,000
Salaries and wages payable		0
Note payable		56,000
Interest payable		0
Deferred revenue		0
Common stock		63,000
Retained earnings		28,460
Sales revenue		152,000
Interest revenue		0
Cost of goods sold	73,000
Salaries and wages expense	19,200
Rent expense	11,000
Depreciation expense	0
Interest expense	0
Supplies expense	1,100
Insurance expense	0
Advertising expense	3,300
Totals	363,460	363,460

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

Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2021, were $1,800.
On October 1, 2021, Kastina borrowed $56,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
Depreciation on the office equipment for the year is $10,000.
On December 1, 2021, $3,000 rent was paid to the owner of the building and recorded a journal entry to prepaid rent. The payment represented rent for December 2021 and January 2022, at $1,500 per month.
On March 1, 2021, Kastina lent a customer $26,000 and a note was signed requiring principal and interest at 9% to be paid on February 28, 2022.
A customer paid Kastina $2,300 in December for 1,590 pounds of spaghetti to be delivered in January 2022. During December, Kastina credited sales revenue and needs to adjust for unearned revenue.
$800 of supplies remained on hand at December 31, 2021.
On April 1, 2021, the company paid an insurance company $6,360 for a two-year fire insurance policy. The entire $6,360 was debited to prepaid insurance.

Prepare the necessary December 31, 2021, adjusting journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)