Peyton Approved
Adjusting Journal Entries
2017
Date	Accounts	Debit	Credit
31-Dec	Depreciation Expense
	Accumulated depreciation
31-Dec	Amortization Expense
	Accumulated Amortization
31-Dec	Interest Expense
	Interest Payable
31-Dec	Insurance Expense
	Prepaid Insurance
31-Dec	Baking Cost of Goods Sold
	Baking Supplies
31-Dec	Office Supplies Expense
	Office Supplies
31-Dec	Wages Expense
	Wages Payable
		-	-

Scenario for adjusting entries: Year end is December 31, 2017. Peyton Baking Company uses the following accounting practices: . 0 Inventory: Periodic, FIFO for both baking and merchandise o Baking supplies: $27,850 ending inventory Equipment: Straight line method used for equipment o Mixing machine: $5,000 initial cost, $500 salvage value, 3rd year of use of 7 total ($642.86 per year) Ovens: $8,000 initial cost, $1,000 salvage value, 3rd year of use of 7 total ($1,000 per year) Other depreciable equipment: $4,000 initial cost, $0 salvage value, 1st year of use of 4 total ($1,000 per year) Bakery Leasehold improvements: $10,000, 2nd year of use ($2,000 per year) Trademark for company name: Initial cost, $2,300, 3rd year of use Office supplies: Periodic, FIFO. Ending balance is $250. Pay period is every 2 weeks. Last pay period ended December 27. 60 employees with a daily pay of $5,700. All receive pay through December 31. Financing: 6% interest note payable was made on January 31, 2017, and is due February 1, 2019. 5-year loan was made on June 1, 2017. Terms are 7.5% annual rate, interest only until due date. Insurance: Annual policy covers 12 months, purchased in February, covering March 2017- February 2018. No monthly adjustments have been made 0 . 0 Other information: An employee slipped and fell in the baking area and has filed a lawsuit. The company lawyer indicates that it is probable that the company will be found liable. No additional information is available