Prob 3

The Chicago Company has given you the following information from their unadjusted trial balance for 2018. They make adjustments yearly. Using the additional information, they provided, prepare the adjusting journal entries in good form in the journal provided.

1. Depreciation for the year was $17,550.

2. Supplies at the beginning of the year were $2,500. Supplies purchased during the year were $1,000. At the end of the year, supplies on hand totaled $2,250.

3. Wages are paid on the 1st of the month for the second half of the previous month. Employees earned $16,000 the second half of December.

4. A loan taken out on May 31 was for $180,000. A 3-year note was signed with an interest rate of 7%. The payments are due in 3 installments each year on June 1.

5. A one-year insurance policy was purchased on June 1st for $5,040.

Using the following headings, classify the accounts and their normal balances. Use the worksheet for Problem 3. (a) Current Assets (b) Long-term Investments (c) Property, Plant, and Equipment (d) Intangible Asset. (e) Current Liabilities (f) Long-term Liabilities (9) Owner's Equity (h) Revenue (i) Expense () Other Revenue (k) Other Expense Account Description Normal Balance Classification (a) through (k) 1. Accounts Payable 2. Accounts Receivable 3. Accumulated Depreciation 4. Buildings 5. Cash 6. Dividends 7. Furniture 8. Income Taxes Payable 9. Interest Income 10. Interest Payable 11. Loss on Disposal of Fixed Assets 12. Mortgage Payable 13. Salaries & Wages Expense 14. Sales Revenue 15. Supplies 16. Unearned Service Revenue