Pr. 3-133Adjusting entries and account classification.

Selected amounts from Trent Company's trial balance of 12/31/14 appear below:

1.Accounts Payable$ 160,000

2.Accounts Receivable150,000

3.Accumulated DepreciationEquipment200,000

4.Allowance for Doubtful Accounts20,000

5.Bonds Payable500,000

6.Cash150,000

7.Common Stock60,000

8.Equipment960,000

9.Prepaid Insurance30,000

10.Interest Expense10,000

11.Inventory300,000

12.Notes Payable (due 6/1/15)200,000

13.Prepaid Rent210,000

14.Retained Earnings818,000

15.Salaries and Wages Expense328,000

(All of the above accounts have their standard or normal debit or credit balance.)

Part A.Prepare adjusting journal entries at year end, December 31, 2014, based on the following supplemental information.

a.The equipment has a useful life of 15 years with no salvage value. (Straight-line method being used.)

b.Interest accrued on the bonds payable is $15,000 as of 12/31/14.

c.Prepaid insurance at 12/31/14 is $25,000.

d.The rent payment of $180,000 covered the six months from November 30, 2014 through May 31, 2015.

e.Salaries and wages earned but unpaid at 12/31/14, $22,000.