Month End Adjusting Entries There are 10 applicable adjusting entries that need to be made as of the end of the month based on the information provided above. When recording these adjusting entries consider the following facts: 1. Interest expense will be recorded as an operating expense item on the income statement. 2. Record the necessary adjusting entries related to pre-paid expense as separate journal entries. When reviewing the supply room as of the end of the month, Mason Automation noted that it had $3 Million 3. worth of supplies still on hand. As of the end of the month, 4,620 cars were completed for Highland Inc. and the performance obligation had been met on those 4,620 cars. As such, revenue was determined to be earned on those 4,620 vehicles and it was noted that each vehicle costed $7,700 to manufacture. (These journal entries are considered 2 of the 10 total 4. adjusting entries). Mason Automation uses the balance sheet approach in estimating the allowance for doubtful accounts as of the 5. end of the period. Based on industry average, Mason noted that it will use 10% of receivables as an estimation. 6. There should be two separate entries related to payroll that is recorded. Note on Balance Sheet: When preparing the balance sheet, close out net income to retained earnings