Preparing Adjusting Journal Entries

The following transactions and events for Stellar Corp. are being reviewed for possible adjusting entries at December 31, 2020 (the end of its accounting period)

7. On September 1, 2020, the company loaned $60,000 cash to another company. The loan was at 10% per year and was due in six months; interest is payable at maturity. Cash was credited for $60,000, and Note Receivable was debited on September 1 for the same amount.

8. On January 1, 2020, Shipping Supplies amounted to $200. During 2020, shipping supplies that cost $4,000 were purchased and debited to Shipping Supplies. At the end of 2020, a physical inventory count revealed that shipping supplies still available were $800.

9. At the end of 2020, property taxes for 2020 of $59,000 were assessed on property owned by the company. The taxes are due no later than February 1, 2021. The taxes have not been recorded on the books because payment has not yet been made.

10. The company borrowed $120,000 cash from the bank on December 1, 2020. A 60-day note payable was signed at 9% interest payable on maturity date. On December 1, 2020, Cash was debited and Note Payable credited for $120,000.

11. On July 1, 2020, the company paid the city a $1,000 license fee for the next 12 months. On that date, Cash was credited and License Expense debited for $1,000.

12. The company owns three SUVs used by its executives. A six-month maintenance contract on them was signed on October 1, 2020, whereby a local garage agreed to do all the required maintenance. Payment was made for the following six months in advance; specifically, on October 1, 2020, Cash was credited and Repair Expense was debited for $9,600.

Prepare the adjusting entry (or entries) that are necessary, if any, on December 31, 2020, for each item 7 through 12.

• Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).